environment magazine

WILL GOVERNMENT RECOGNISE THE POTENTIAL FOR SOLAR PV IN THE UK?

By Howard Jones MD, Southern Solar and Chair of The Solar Trade Association

Solar PV has the power to revolutionise the way we produce energy in the UK, providing secure, affordable green electricity and cutting our carbon emissions.  But changes to Government policy are threatening the future of solar PV and with it our energy security.   

Solar is the world’s fastest growing energy technology and has the potential to generate around a third of the UK’s electricity needs with no emissions – and that’s if we just put it on the nations south facing roofs.  Globally, governments are encouraging their domestic solar industries to build capacity and create renewable electricity – as people around the world realise that electricity from solar PV will become the cheapest source of energy. 

Last year, more solar PV capacity was installed across Europe than any other renewable technology.  In 2010, Germany installed more than double the amount of solar that the UK plans to install by 2020.  German politicians estimate that solar will meet over 50% of daytime electricity needs by 2020. More than 2.5 million people now use solar PV to generate electricity, while the German Environment Minister says that by 2013 solar PV will become cheaper than energy generated from other sources, including nuclear and fossil fuels. 

Despite a proven track record for solar PV in other markets, Department of Energy and Climate Change (DECC) has proposed drastic reductions to the financial incentive scheme – the Feed in Tariff - that is vital to the development of a sustainable solar industry in the UK.  The Government is rejecting the chance to build the UK’s green economy and create many new jobs. 

If the UK invests in a solar future now, we can bring down costs faster, and encourage enterprise and manufacturing here in the UK. Investment now will also enable us to build the installation capacity and supply chains required to deliver quality solar power stations on a wide range of scales.  If we wait for the costs to fall, it will take longer to reach the time when no subsidy is needed and the delayed investment will result in the UK losing major manufacturing, tax revenue, export, employment and market-share opportunities in this vital and vast new global industry.  Seventy percent of the jobs involved in solar PV cannot be exported as they are involved with delivery of the projects.

But instead of supporting solar, DECC has announced radical cuts in the Feed in Tariffs for projects larger than 50kW, in its “Fast Track Review” published in March, implemented from 1^st August 2011.  The Government plans to support installing PV only on a relatively small number of households, with very limited opportunities for community or public sector solar and no commercial sector or ground-mounted PV schemes.   The Budget further proposed to reduce the tax benefits for community renewables schemes.    

First Hand Experience of Community Schemes Under Threat

Solar PV offers an amazing opportunity for communities to set up their own renewable power companies because it is relatively easy to implement. I have had first hand experience of setting up a community scheme which would not be possible under the new reduced FITs regime.  

In Lewes, East Sussex, the energy services company Ovesco has teamed up with Harveys, the local brewery, to install the country's first community-owned solar power station on the roof of Harveys' warehouse.

Installed by Southern Solar, the 544 solar PV panels will generate 98 kilowatts peak, an estimated 92,000 kilowatt hours per year. The installation will be completed by August 1st this year, all the power generated will qualify for the top rate feed-in tariff of 34p per kilowatt hour, ensuring returns to investors of 4% per annum over the 25 years of the scheme.

Community schemes like this are now under threat – following two blows that have recently emerged since the scheme was first planned: Climate Change Minister Greg Barker has decided to cut the tariff above 50 kilowatts to 19p as of August 1st, and George Osborne has decided to remove EIS tax relief from FIT businesses.

Lewes Football Club has already expressed interest in hosting a PV array and its south-facing roof is scheduled to be Ovesco's next site. Other sites are being considered but we will now have to look at installations below 50kW to be eligible for a Feed In Tariff that is workable with a return for the people who have invested from the Community.

Ovesco's long-term plan is to make Lewes District self-sufficient in renewable energy by 2030, but the general uncertainty coupled with changes to policy make this grand vision ever more challenging.

Ernst & Young Solar PV Report on 50kW Outlines Potential for Solar

And yet the cost of subsidising the UK solar industry is low.  According to The UK Solar PV Industry Outlook Report on 50kW to 5 MW market, by independent consultants, Ernst & Young, non-domestic solar could thrive in the UK without subsidy from 2017.   With FIT subsidies for solar over 50kW set to be slashed from August large scale solar is not commercially viable leaving much of the industry facing collapse.  

The E&Y report underlines the potential for solar PV to increase competition in the UK electricity market and to deliver subsidy-free power to millions of users shortly after this Parliament.  Instead the Coalition Government has put the UK industry at a serious international competitive disadvantage and made solar more costly than it needs to be in the UK - without first having even quantified the benefits.

With a kick-start the UK can create a mature PV industry, and bring down the costs of distribution and installation with dramatic effects.  Investing in solar today is an investment in the subsidy-free energy revolution we so badly need and which solar can deliver well before the end of the decade.

A Solar Revolution Increases Competition and Helps Democratise Energy in UK

We can have a solar revolution for a fraction of the cost currently being spent on other energy generation technologies, with the added benefits of energy security and new green jobs.  Energy and climate change are the two issues that will dominate the next century.  We need solutions that can help us address both issues at once, whilst allowing our communities to thrive.

Solar PV allows us to democratise energy and distribute access to energy more fairly.  Currently energy supply and energy policy in the UK is dominated by a handful of huge companies.  By encouraging people to use PV, we create hundreds and thousands of small providers.  You and your roof become a power station and together we begin to break away from our dependence fossil fuels.

In reviewing technologies available to help us meet carbon reduction targets in the UK, the Government is failing to recognise solar as the viable, safe and practical option that it so obviously is.  We are calling on the government to enable everyone to benefit from secure, clean energy projects of all sizes – on our homes, on our businesses, our industries and in our communities. Solar really is the future – and now we just need the policy makers to realise it.

If you are interested in finding out more please visit www.oursolarfuture.org.uk to sign up to our campaign and join the solar revolution.