The government had its day in court in March but lost. The judges decided to go against the cuts proposed by the coalition to the feed-in tariff that is paid to consumers who generate their own electricity using solar power. That decision won plaudits from environmentalists – but the future of such subsidies is still uncertain.
The nature of such tariffs for generating electricity is that they must decline over time as the technology becomes more attractive and widespread. Meanwhile, some question the focus on micro-generation such as domestic solar when, they argue, money could be spent more effectively on generating renewable energy through large projects such as windfarms.
The UK is sometimes thought of as unsuited to solar but the statistics show that last December there were 230,000 solar projects in the country with a capacity of 750MW and by February this had increased to 1,000MW. The scale and scope of projects is increasing all the time. Some of these new additions will have benefited from the courts’ decision to overturn the proposed slashing of the feed-in tariff for solar panels installed between 12 December 2011 and 3 March this year. These installations will now be eligible to receive the payments at the previous higher rate – 43.4p/kWh.
According to the Renewable Energy Association (REA), solar power is the fastest-growing energy technology. Many thousands of people are using solar photovoltaics (PVs) on their roofs to convert the sun’s energy into electricity, and others are heating water using solar thermal technology.
PV technology is attractive because it delivers electricity at the point of use. Solar PV cells can be used for a wide range of applications such as watches and calculators, and individual houses, but this ranges up in scale to large grid-connected solar farms. Providing that there is a suitable place to mount the system, PV can be used for domestic as well as larger industrial or commercial applications and has various cost-effective applications to suit specific needs, says the REA.
An additional benefit of PV is that it can be installed in areas where grid connection or other forms of generation are too expensive or not feasible. This may be in remote locations, but could also be in a city centre where grid connection may be impractical. For example, it can be cheaper to power parking meters with solar energy than from the grid.
PV costs are falling, but they need to fall faster. The REA says, however, that by 2030 the technology has the potential to be one of the cheapest methods of generating electricity.
Dr Shawn Qu, chief executive of Canadian Solar, which has supplied technology to some installations in the UK, says: “I am evaluating the opportunity to increase our presence in Britain.” This ambition has included a decision to sponsor Fulham FC. “I like the UK,” Qu adds. “We have seen policies here come into line with those in other European countries in terms of the support for solar. It’s important that those support mechanisms are maintained, because a policy landscape that shifts and changes is harmful to the industry.”
Qu has seen the industry develop over the past two decades in his native Canada where Ontario has been a pro-solar state since the mid-1990s. He believes Britain could benefit from similar legislation to the province’s Green Energy Act of 2009, which paved the way for 1GW of solar projects.
“It means we have a stable of projects that will gradually come to fruition,” Qu says. “And I would reiterate that a stable and well thought-out policy environment is very important.” The cost of the technology is already falling but at Canadian Solar efforts to accelerate that decline consist of trying to wring as much power out of a system as humanly possible.
Qu says: “First of all on the technology side we are making incremental improvements to drive the cost down. We try to improve the solar cell efficiency; with every measure we may improve the efficiency by 0.1%, for example. It’s very incremental.”
Meanwhile, targets loom. An EU directive requires the UK to meet 15% of its overall energy demand from renewables by 2020. This includes a requirement to meet 10% of transport demand from renewable sources. The UK intends to hit the rest of the target by meeting 12% of heat demand and 30% of electricity demand from renewables by 2020, according to the Department of Energy and Climate Change 2009 renewable energy strategy.
Solar will play its part here but campaigners will hope that incentives such as the feed-in tariffs are maintained or at least reduced gradually, giving the industry a chance to establish itself properly.
For all the noise that has been made about the green industry – Peter Mandelson’s cry for “green collar jobs” seems like an age ago – some now believe that the severe problems facing the global economy are derailing the impetus towards an environmentally friendly and sustainable future. They argue that this will remain the case until the economy shows signs of recovering to something like its pre-2008 levels.
The Renewable Energy Association warns that there is a danger that the UK is missing an opportunity to make an impact in the global green industry. Part of the problem is skills. The REA estimates that an industry currently employing 100,000 will need to swell its ranks by 300,000 by 2020 to meet the European targets.
Gaynor Hartnell, chief executive of the REA, comments: “The government needs to enrich its understanding of the benefits of renewable energy investment. This debate is being pushed forward on an ad hoc basis by various reports and well-informed politicians from all parties. There is frustration that government leadership is missing in practice, despite notable speeches, for example by Nick Clegg, on the importance of prioritising investment in energy infrastructure.
“Several countries, from America to Japan to Germany, have realised that taking the long-term view and investing in renewables is a significant step on the route out of economic malaise. The UK renewables industry wants to work with the coalition government to realise the huge contribution our sector can make to jobs, growth and prosperity.” The travails over solar, then, are a microcosm of a much wider issue.