As soon as the Feed-in-tariffs were launched we've been treated to an almighty battle in the Guardian comments pages on whether solar PV is a waste of time or not. In the anti corner is George Monbiot who claims it's a scam. On his side, Monbiot claims to have David MacKay who, in his excellent book Without the Hot Air, writes sceptically of Solar PV. In the other corner is Jeremy Leggett of Solar Century and Alan Simpson, Labour MP for Nottingham South.
What to make of it all? Chris Goodall has written a level headed account of whether Solar PV is value for money. And, this, is the crux of the matter. Except that depends on what variables you're looking at. So in an attempt to cover all the variables that are being used in this debate, I hope to bring some clarity.
1. Solar PV is not very good in the UK
There's some truth in this. It's not that sunny compared to other parts of Europe, Africa or California for that matter. In the UK, the best generation output is in the south and east. By contrast, the UK is blessed with some of the best wind, wave and tidal locations in Europe. But, generation can still occur when there is cloud cover and in winter and can knock off a decent chunk off your electricity bill.
2. Solar PV is a waste of money
Partly right. Wind is far better value - you get a better return on wind. Chris Goodall highlights a good comparison on his blog. Essentially, you get a 13% return on wind and around a 5-7% return on solar PV.
But wind is more expensive -up to 50,000 for a small turbine - and you need planning permission. You also need a good location away from buildings and trees (so no good in the city where most of us live). Wind also tends to require more maintenance. Solar, although less efficient and less value for money, is cheaper, requires no permission and can fit on most buildings requiring little maintenance. How else are we supposed to get homeowners to generate?
3. It didn't work in Germany where it was pioneered.
Monbiot is keen on this argument. It's true that the Germans are planning to reduced their Feed-in-Tariffs, but the main reason is that it worked too well! Solar was heavily subsidised and made Germany a world leader in renewables, but such subsidies cannot go on indefinitely. The UK Feed-in-tariffs are likely to be cut from its current rates as solar PV installation rates soar.
4. What Monbiot neglects
ESCos
Energy service companies or ESCos will soon become a common business model. Essentially, an ESCo will install solar PV (or other renewables and energy efficient packages) for free with the client paying back over the next 25 years. You get the electricity savings, the ESCo gets the Feed-in-Tariff. This model means that social housing associations will benefit as they offer economies of scale and guarantees on payment of bills alleviating the issue of solar PV being a middle class bit of eco-bling.
Councils are likely to offer ESCo services getting whole streets, churches and other community groups to combine to secure economies of scale.
Behavioural Change
There's some strong evidence from UEA studies that the installation of solar PV and Thermal, although less efficient than other renewables, initiated changes in the way householders used energy. Because householders were conscious of generating energy they became more concerned about wasting it. Those with heat pumps actually increased their energy output!
Ultimately we need a mix of renewable installation and energy efficiency. Dismissing solar PV is too easy, but we need to look at the full argument beyond the polemics.
Friday 19 March 2010
Monday 1 February 2010
UK Feed in Tariffs announced
DECC has, at last, announced the UK feed-in-tariffs (FiTs)for renewable generation. On the whole it's an increase in the tariffs depending on the technology. The government scheme to start in April this year will include:
- payment for the electricity you generate guaranteed for 20-25 years
- payment for any surplus electricity you don't need guaranteed for 20-25 years
- money saved from the electricity you no longer need to buy
Although the return on investment averages out at around 5%-7%, Friends of Earth thought the policy too timid and the Solar Trade Association argued that returns should have been more like 10% to garner interest.
However, Solarcentury executive chairman Jeremy Leggett said the tariffs would be enough to encourage homeowners to install solar panels earning more than £1,000 per year with a typical solar electric system.
In plain english what does it all mean?
If a business or a household installs a standard Solar PV unit it's likely to generate 2-2.5kilowatt peak with an annual output of around 2000KWh.
Annual output: 2000 KWh
FiT 41.3p per KWh (guaranteed and index linked for 25 years, paid to you by your electricity provider)
Total value of FiT £823
Used in the home/business 1,200 KWh (your electricity supplier is charging around 12p KWh)
Savings from not buying supplier electricity £144
Electricity exported 800 kWh (electricity you don't need at various points in the day. You can sell for 3p or on the open market. The 3p rate is guaranteed for 25 years and index linked)
Export payment £24
Total return £991
The figures may vary somewhat, but they are in range with most calculations I have seen. The cost of this type of installation will vary from £8000-£12000, but the good news is that the FiT and export price is index linked which means a return on investment is likely to be around 5%-7%. Other factors worth considering are whether you predict energy prices will rise as this will improve returns. At the same time, energy security is increased and you have significantly reduced your carbon emissions.
The great advantage of solar PV is that it is easy to install and once it's there you don't have to do much. Maintenance is minimal. The main disadvantage is that the load factor is low compared to wind or biomass.
Next time I'll be comparing Solar PV with Wind.
Tuesday 19 January 2010
Post Copenhagen
So what was the fuss about? You'd be forgiven to think that the Copenhagen meeting was a failure and that the environment has fallen off the agenda of most leaders. In fact, in the UK and in most other countries 2010 will be a year of new environmental legislation for many companies. And, Copenhagen, far from being a failure, may well turn out to be a precursor to a legally binding treaty signed in Mexico at COP16 this year.
Copenhagen was always going to be difficult to produce a success. The Kyoto Protocol in 1997 was agreed right at the last minute and then the Americans pulled out. It wasn't until the Marrakesh Accords in 2001 that the mechanisms for Kyoto were agreed and only when the Russians voted to accept the treaty in 2004 did it formally begin in 2005.
At Copenhagen, a rough agreement includes India, China and the USA. Reducing Emissions from Degradation and Deforestation (REDD) is also included and pretty much agreed. Forestry or the reduction of it accounts for 17% of global emissions and any target here is to be welcomed. The EU is willing to reduce emissions by 30% and there is very little challenge to the science of climate change. It won't be easy, but there will be a legally binding agreement in Mexico this year.
Regardless of Copenhagen, the EU is committed to a 20% cut in emissions which equates to a 34% by 2020 for the UK. If Mexico 2010 is successful, it's likely that the EU will increase its emissions reduction to 30% which equates to a 42% for the UK by 2020. Even if you include the reduction in emissions since 1990, there is a still a lot to do by 2020. Every business and household will need to reduce emissions by around 30%.
That's why 2010 is going to be an important year for the UK. In April, the CRC Energy Efficiency Scheme and a new Feed-in-Tariff regime begins. One is about energy efficiency for large firms; the other is a subsidy regime for households and businesses for renewable generation.
The CRC Energy Efficiency Scheme will include every school, hospital, most public buildings as well as large firms that have an energy bill of around £500000. For every tonne of CO2 emitted, the organisation will have to pay £12 a tonne. For Norfolk County Council that's nearly £1million. They will get most of this back, but it depends on how much energy they have reduced compared to other organisations. All CRC participants will be part of a league table where the position will dictate the additional fee you pay or the bonus you receive.
Norfolk County Council emissions are rising and, like other councils, face a rising CRC bill unless they can conserve energy hence the move to switch off street lights. Organisations that claim to be green will soon be exposed by the CRC league table. What's interesting about the CRC is that organisations won't be able to reduce emissions by investing in renewables: they have to reduce energy consumption.
In the next few posts, I will be writing about what households and businesses can do reduce energy use and increase renewable investment under the CRC and the new FiT regime. I'll be analysing the impact of voltage optimisation, change behaviour, solar PV, AD and much more.
Copenhagen was always going to be difficult to produce a success. The Kyoto Protocol in 1997 was agreed right at the last minute and then the Americans pulled out. It wasn't until the Marrakesh Accords in 2001 that the mechanisms for Kyoto were agreed and only when the Russians voted to accept the treaty in 2004 did it formally begin in 2005.
At Copenhagen, a rough agreement includes India, China and the USA. Reducing Emissions from Degradation and Deforestation (REDD) is also included and pretty much agreed. Forestry or the reduction of it accounts for 17% of global emissions and any target here is to be welcomed. The EU is willing to reduce emissions by 30% and there is very little challenge to the science of climate change. It won't be easy, but there will be a legally binding agreement in Mexico this year.
Regardless of Copenhagen, the EU is committed to a 20% cut in emissions which equates to a 34% by 2020 for the UK. If Mexico 2010 is successful, it's likely that the EU will increase its emissions reduction to 30% which equates to a 42% for the UK by 2020. Even if you include the reduction in emissions since 1990, there is a still a lot to do by 2020. Every business and household will need to reduce emissions by around 30%.
That's why 2010 is going to be an important year for the UK. In April, the CRC Energy Efficiency Scheme and a new Feed-in-Tariff regime begins. One is about energy efficiency for large firms; the other is a subsidy regime for households and businesses for renewable generation.
The CRC Energy Efficiency Scheme will include every school, hospital, most public buildings as well as large firms that have an energy bill of around £500000. For every tonne of CO2 emitted, the organisation will have to pay £12 a tonne. For Norfolk County Council that's nearly £1million. They will get most of this back, but it depends on how much energy they have reduced compared to other organisations. All CRC participants will be part of a league table where the position will dictate the additional fee you pay or the bonus you receive.
Norfolk County Council emissions are rising and, like other councils, face a rising CRC bill unless they can conserve energy hence the move to switch off street lights. Organisations that claim to be green will soon be exposed by the CRC league table. What's interesting about the CRC is that organisations won't be able to reduce emissions by investing in renewables: they have to reduce energy consumption.
In the next few posts, I will be writing about what households and businesses can do reduce energy use and increase renewable investment under the CRC and the new FiT regime. I'll be analysing the impact of voltage optimisation, change behaviour, solar PV, AD and much more.
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