March 2006
The Growth Of PV And Solar Power
Are increasing energy bills, fears about insecure fuel supplies and concerns about climate change encouraging householders and businesses to invest in solar power? Or could it be due to funding?
Solar power can be used by solar hot water panels for providing domestic hot water, and by solar photovoltaic (PV) panels for providing electricity.
The Solar Photovoltaic’s Demonstration Programme was launched by the government in 2002 with the aim of kick starting the UK market for solar PV. The scheme provides funding of between 40 and 50 per cent for the installation of solar electricity panels for both domestic and commercial applications. The funding has caused a massive increase in solar installations on homes and public buildings across the UK. Increased demand has also cut the cost of PV equipment by an average of 13%, and installing companies have grown from seven in 2002 to over 50 today.
Funding for small scale renewable installations other than PV panels is also available. Government grants from Clearskies ( England, Wales and Northern Ireland) and the Scottish Community Householder Renewables Initiative (SCHRI) respectively, were offering homeowners £400 cashback or 30% in Scotland for solar hot water installations. However, as the Scottish grants continue, the £400 grant from Clearskies is no longer available.
Unfortunately, the PV programme is also due to end in March 2006 but will be replaced by a new programme - the Low Carbon Buildings Programme which will start in April 2006, subject to State Aids clearance. The new programme will supersede the current grant schemes for small-scale renewable energy technologies.
This is good news for householders, businesses and installers. Although environmental concerns are important, it would seem that without some kind of financial incentive, many householders and businesses would not be willing to invest in solar power. This was the finding in a recent report published by the Energy Saving Trust.
The Energy Saving Trust, in conjunction with Element Energy Limited, E-Connect and Cambridge University Faculty of Economics, has undertaken a study to examine the future potential for microgeneration technologies such as solar PV, small-scale wind turbines and fuel cells. The following are some of it’s findings:
- There are currently less than 100,000 microgeneration installations in the UK (of which most are solar water heaters installed pre-2000).
- Level of grant funding is closely correlated with the annual number of installations
- The sectors seeing the most yearly installations are PV and solar water heating, in response to generous grant schemes.
- Photovoltaics are not generally cost effective at present. Significant incentives are required to maintain the market for small grid connected systems. Cost effectiveness is not predicted to occur until 2030. However, a technology breakthrough could reduce capital costs and bring this forward towards 2020. Lack of planning issues means the market potential for PV is amongst the largest of those studied.
- Solar water heating is currently the largest microgeneration industry, installing 2000 units annually. Generally, solar water heating is not cost effective at present. The technology is most effective if replacing electric heating systems. However, while capital costs are projected to reduce, it is unlikely that solar water heating will provide cost effective water heating without substantial grant support in the order of 50% of capital costs
A full copy of the report can be found here.
If you would like to discuss the issues raised in the report or are interested in rolling out a photovoltaic / solar system Pro Enviro can help you.
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