environment magazine

Tackling the next Barriers to the Implementation of Photovoltaics (PV)

 Bruce Cross, Founder and Managing Director, GB-Sol Ltd.

Finding a model that maximises UK jobs
The PV market has seen explosive growth over the last year, but this has been tempered by the uncertainty of a hasty government review. No market can adjust overnight to the reduction of its largest system to just 1% of the previous value so it will take some time for investors to regain some of their previous enthusiasm.

The government has moved from a Tariff (where the industry knows with certainty what will be the likely type and unit size of market) more towards a grant system (where the pot of money for incentives may run out at an uncertain time and may, or may not, be replenished).

This change immediately restricts prospects for pure UK companies as they are starting from a low level and have to invest in building capacity and hence raise capital to commit to large overhead expansion. The overseas companies come from large (The German market is already over a hundred times larger than the UK) markets where their economies of scale allow them to come and operate in the UK knowing they can pull back to their home markets very quickly when the funding cap is reached. The consequence of this policy change could well be that the UK feed-in-tariff will create many more jobs abroad than in the UK.

It is unlikely that voters will approve of a technology that they perceive (rightly or wrongly) as being expensive to subsidise (the popular press have already started raising such questions) when it does not create local jobs. The industry has to be able to proffer a solution which both public and politicians can support, and a high level of UK content is important to the long term prospects for PV as a significant industry. The REA and other trade organisations are pressing for the government to broaden their commitment to PV, but have yet to see any signs of improvement.

Finding economic business models for multiple small installations
The future for PV will focus on many small installations, and as such may benefit the small installers, and those running multiple schemes. There will be opportunities for novel business models that can bring larger groups of individual installs into a single entity, but without exceeding the new 50kW ‘economic payback limit’. Marketing finance and delivery will be challenging, but the implementation should still be able to utilise the present regulatory infrastructure provided by MCS and REAL.

For public sector and commercial systems the 50kW limit has yet to be tested in the context of several buildings on one site, how will the systems be rated if they all have a separate electrical connection but are located on separate buildings on the same site? Will we have a ‘postcode lottery’ dependent on the local interpretation of these rules?

The industry now needs to focus on delivering PV as many small systems. The previous model had been evolving for large scale projects mainly delivered directly from the manufacturer, this has to transform into a more distribution focussed and customer facing industry, which could contain many innovative new business models.

The regulatory framework needs to evolve to simplify the process for connecting multiple small installations to the grid. G83 works well when applied to a single domestic install, but a group scheme, even if widely scattered, is being treated as one unit and pre-authorisation is being required. Typically this is a scheme for a social housing provider who has housing stock scattered over a town or region. This pre-authorisation delays the project and adds unnecessary administration costs, without adding significant value. The DNOs (District Network Operators) should be resourced to give a speedy response, and clear guidelines should be published which allow some scattered groups to be treated as individual installs, provided they fall within certain criteria, and hence only require post-installation notification.

Visual appearance might become a barrier to PV.
In a new market for a little understood domestic product there is a temptation to install as large a system as possible to maximise economic return for the client.

Installed systems that are out of scale with their surroundings will demotivate others in the locality from following suit. There is also a possibility that a backlash will come from visual lobby groups, the resistance to windfarms has been based mainly on appearance, and the PV industry would do well to avoid any such adverse reactions.

The industry should seek not just satisfied individual customers but exemplars to encourage greater uptake.
As the market develops people will start to appreciate that there are different types of system at different levels of cost. As with any purchase for their house, the knowledgeable home owner will often chose a higher priced solution when there is a clear visual or quality difference.

In future we may find that the presence of a PV roof will increase the resale value of a property, but only if it enhances the property. A ‘bolt on’ PV array could reduce the likelihood of a sale due to its visual appearance.

In a maturing marketplace there is a clear differentiator in having an aesthetically pleasing integrated PV roof. This may be in the form of a ‘glazed roof’ system or a PV tile/slate system, but will surely be viewed as the sophisticated and preferred solution, and the specifiers and influencers should place a premium on such solutions.

There are other advantages in the integrated systems which reinforce the reasoning because they replace traditional roofing materials, and so can reduce weight and cost. In a retrofit project, there have been concerns that PV systems add weight to a roof, and not all companies are performing a structural survey to verify the existing structure can support the extra load. When an integrated system is fitted, this generally has a weight equivalent to slates, and less than concrete tiles, therefore with no increase of weight, no increased load on the structure. On the other hand, when used on a new build project, and integrated system has a cost advantage in that it displaces traditional roofing materials, thus reducing the marginal cost of the PV system.