Solar Panel Uproar & Other Renewables News
This is the first of what might become regular news roundups from me as I think it’s hard for most people to keep on top of all the happenings in the green industry. I spent hours going through articles and news stories to separate the wheat from the chaff so that you don’t have to. This week has thrown up some very interesting stories that will impact how the UK generates it’s energy going forward and how renewables will play their part.
We start with some consumer advice that requires some very prompt action should you be involved…
Quick! Get Those Solar Panels Up Now
(Update: The government yesterday confirmed this news although with a slightly different cut-off date of 12th December. It has indeed sparked a rush to get installations up. Read more here)
It never fails to surprise me when certain secret documents are leaked to the public and while it’s hardly a matter of national security, a fact sheet that was accidentally published by the Energy Saving Trust last week disclosed information that has caused a bit of a fuss in the solar panel market.
At the moment, installing photovoltaic (PV) panels can provide a good return on your investment with Feed-in Tariff (FIT) rates of 43p/kWh providing an income for those who take the plunge. But for any installations that fail to get their FITs application in before 8th December, this rate will fall to 21p/kWh.
This pushes the length of time required for payback from 10 years to 18 years with a rate of return somewhere around the 4% mark.
The government say that due to falling capital costs of such PV systems, returns had been much higher than expected (up to 10%) where it was only intended to provide generators with a return of 5% – 8%.
So if you are in the process of installing solar panels on your home, best put your foot on the gas to ensure you get your FITs application in before 8th December. If you were thinking about getting an installation on your property as a form of financial investment but haven’t yet begun the process then you might want to think again.
If, on the other hand, your desire to lead a more sustainable life is the driving force behind your decision, there are many companies that are in good financial positions and who will get through this FIT reduction and come out the other side pretty much unscathed. Off the top of my head, SolarTech are a nationwide provider of solar technologies to both domestic and commercial customers who are worth speaking to.
Also, I have been a big fan of these rent-a-roof schemes where a household receives free solar PV panels and gets cheaper electricity bills for their troubles. The company installing the panels receive much of the benefit that the FITs produce but they are also subject to the proposed new rates and so these schemes could disappear altogether.
This would mean fewer hard up households benefiting from cheaper electricity and, if the industry is to be believed, up to 25,000 jobs could be under threat as companies are forced to scale back.
The reasons the government give for this sudden change of heart include: a 30% drop in the capital costs of installation, more than double the intended return on investment and a much higher take up of the scheme which is draining the budget far faster than expected.
My view: this is not an easy call to make because small-scale solar power installations like these are undoubtedly more expensive per kWh produced than other renewable sources but they do seem to prove more popular with the public because they can actually see some benefit to them in the form of financial return.
I think this cut-off point is a little soon and does not give the industry the time it needs to adapt. I expect many hundreds, if not thousands of job losses because of this and for people who have just trained in this sector, it will no doubt be a kick in the teeth.
Read more reaction on the ClickGreen website.
Chris Huhne Fights Back
Energy secretary Chris Huhne hit back at critics of renewable energy calling them “short-termists, arm-chair engineers, curmudgeons and faultfinders” in what appeared to be a shot at Chancellor George Osbourne.
Huhne made the point that “We are not going to save our economy by turning our back on renewable energy.” which was a fairly direct rebuttal to Osbourne who had said previously “We’re not going to save the planet by putting our country out of business”.
The argument stems over the costs attached to renewables, especially at a time when the spending review has led to cuts in all parts of the public sector.
My view: if the investment is spent wisely on projects that create jobs in the UK (and not abroad like many seem to right now) then I can see a massive future in the green energy industry. The problem of cost is evident and yes it would be cheaper to build more coal powered stations instead of wind turbines or tidal projects but Huhne is right to criticise this short term view.
Read more on The Telegraph.
WWF Envisage a Green UK by 2030
The WorldWide Fund for Nature this week released a report which details ways in which the UK could produce between 60% and 90% of our electricity from renewable sources.
Although I applaud their thinking, this is a very ambitious goal given the political and financial difficulties being faced right now. It is all the more difficult if you take a look at the current energy mix of the UK which shows renewables at just 7.9%.
The cost of building renewable energy installations would have to come down considerably for the WWF’s proposal to be affordable. Given this, some welcome news came in the form of Siemens revealing plans to cut the cost of offshore wind farms by mass producing certain components.
I hope this is just the first of many initiatives to bring the cost of clean energy production down to more realistic levels.
If you are interested, you can read the full WWF report here: http://assets.wwf.org.uk/downloads/positive_energy_final_designed.pdf
Also in the news…
As if in reaction to my recent post on wind farms, an industry report by Renewables UK (the public voice of wind and marine energy) said that developers need to engage more with the community so that a greater proportion of planning applications get approved.
Onshore wind projects have seen approval rates drop to 42% while the amount of time companies have to wait to gain approval is up from 24 months to 33 months on average.
The government’s Renewable Heat Initiative (RHI) received state aid approval from the European Commission which means that, assuming parliamentary approval, it could be rolled out starting from the end of November.
The RHI basically gives businesses an incentive to generate as much of their heat as possible from renewable sources including biomass, solar thermal, ground and water-source heat pumps and energy from waste.
There might be a second of third phase which includes domestic installations of such heat technologies but for now it is aimed at businesses.
In what is a rather complicated situation, there are fears that the Green Deal could actually divert funds away from other renewable schemes which would negate the expected benefits that come from Green Deal itself.
It seems to me that the Treasury might have to decide whether to increase the spending cap imposed on the DECC or force them to divide limited funds between multiple schemes. Given George Osbourne’s view that I mentioned earlier, this really could be a blow for the Green Deal.
Those of you who are interested can read the whole article here.
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