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Reaching for the skies: the outlook for solar energy in the UK

February 23, 2010
bird's eye view of building

A bird's eye view of SolarUK's new office under construction

Looking forward to spring?  This year, around the same time that swallows return from their African winter quarters to nest in Britain’s eaves and outbuildings, any of their human hosts planning to generate electricity from a clean energy source will see an equally welcome arrival: the new Feed-in Tariff (FIT), a real encouragement to invest in solar photovoltaics that will bring ‘payback’ times right down.

Solar thermal – using the sun’s energy to supply a building with hot water – is not included in this scheme, but if we look ahead to April 2011 for a moment it is easy to imagine that demand for this technology will receive a boost similar to that currently being experienced by photovoltaics.  Because that’s when the Renewable Heat Incentive (RHI) kicks in.

The RHI, which has begun a 12 week consultation period, proposes guaranteeing long-term payments to homeowners and businesses installing solar thermal, ground source heat pumps and other renewable technologies.

However, not everything is blooming in the solar thermal garden.  As outlined recently on the SolarUK blog, rates of return for solar thermal, while attractive, are going to be half those of certain other renewable heat sources.  The Solar Trade Association has expressed its disappointment, saying that ‘despite numerous discussions with Ministers and civil servants during the last year they patently do not recognize the huge opportunities for solar thermal in the UK’.

Solar thermal is a proven technology, and there are over 100,000 installations in the UK.  Other European countries have been quicker to realise its benefits: in Germany, investors in small systems receive grants and low-interest loans and since 1999 there has been a substantial funding programme for research and development projects.

Returning to photovoltaics, not everyone is happy with the Feed-in Tariff proposals either: early adopters of the technology – the pioneers who have sustained the fledgling industry so far – won’t benefit from it.  This prompted YouGen (an online social enterprise and resource for microgenerators) to launch its Campaign for Equal Cashback, posting up a petition demanding that all existing microgenerators with installations of less than 50kW enjoy the same tariff as those who install in the first year of the FIT’s introduction.

Meanwhile, although the start of the Renewable Heat Incentive is still 13 months away, SolarUK has had plenty of enquiries from homeowners who have not been slow to notice that solar thermal is becoming more and more cost-competitive with fossil fuel energy and is a valuable buffer against gas and electricity price rises.  In a climate such as the UK’s, an advanced system such as the LaZer2 can provide 50% to 70% of a household’s hot water needs, often rising to 100% during the warmest months of the year.

If 2010 is the year solar PV finds its wings, solar thermal will be following in its slipstream.

4 Comments leave one →
  1. March 24, 2010 9:35 pm

    My view is that the feed in tariff is, for the domestic market an artificial fix for an inconsistent way of pricing electricity.

    Change the pricing structure and a whole load of problems go a away including the need for FITs. Electricity is charged at a high price for the 1st 1,000 or so units used then a lower price (1/2 price) for the rest. The more energy used, the lower the average price. Poor or low consumers (we want) get charged more. High consumers get it cheaper.

    Reverse this and fuel poor benefit, higher costs for higher use means there is a real incentive to both save energy and generate your own. Feed in tariffs become irrelevant.

    As to affording Microgeneration, the higher energy user will be clearly incentivised by their bill! Its a no brainer!

    The poor or low consumer can#t afford microgeneration anyway.

  2. solarukweblog permalink*
    March 30, 2010 9:51 am

    Yes, that’s a fair point. But there’s a danger of tarring solar power in general with the same anti-FIT brush. The environmentalist George Monbiot used the introduction of the FIT to write this in his Guardian column recently: ‘If you own a house and can afford the investment [in solar panels], you’d be crazy not to cash in. If you don’t and can’t, you must sit and watch your money being used to pay for someone else’s fashion accessory.’

    • March 30, 2010 11:50 am

      Being a pioneer in solar, I installed Solar PV in 2003 and Thermal in 2005 I am very pro. My concern is that FITs will work against the wide takeup of solar, in particular thermal.

      FITs don’t encourage the average householder to install on their roof, otherwise unused sufaces, but they do encourage the investor to pay to have an otherwise productive field covered with them.

      Shifting this high cost low generation (for the UK) system away from the eventual point of use, then brings in transmission losses (not such an issue when generated at the point of use) and the relationship the owner has with power generated. Also, FITs do nothing to support energy conservation.

  3. March 30, 2010 11:59 am

    Perhaps to clarify. I am 100% in favour of solar PV. Also in many respects in favour of FITs, I intend to add to my SolarPV array and benefit from the FIT scheme.

    What I would add is a rehash of the electricity charging scheme to favour conservation and increase the reward (higher cost at higher use) for either self generation or conservation.

    Add the current FIT scheme to a reversal of the charging scheme and we should see a very significant enhancement to the overall incentive. Imagine, 41p per unit for generation and a nominal saving of say 30p!

    With a reversal of the charging scheme, perhaps the higher cost for higher use will more effectively pay for FITs (avoiding the problem Spain has had). Also retaining the positive energy conservation pressure. A win win situation!

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