SOLAR POWER AND THE FEED-IN TARIFF
Written for the Transition Glastonbury website, October 2011
The technology for producing electricity from sunlight has developed well over recent years. Solar energy is becoming more and more affordable and, thanks to the ‘Feed In Tariff’ scheme, it is now very much cost-effective to produce on a small scale. This scheme pays far more than the current wholesale price for selling power to the national grid.
I am one of the director-shareholders at ‘The Old Clinic’, a building in St John’s Square which provides offices and workshops for small local businesses. Recently we realised that we could no longer put off ‘doing the roof’ - it was time to replace the roofing felt, battening, and numerous cracked tiles. Why not, we thought, check out the possibility of installing phot-voltaic (‘pv’) cells whilst we were at it.
Our architect put us in touch with ‘Sunlit Solar’, a firm of local electricians who got enthusiastic about the possibilities of solar power and started installing domestic pv systems eight years ago (www.sunlit-solar.co.uk). Beginning with one or two installations a year, this side of their business has now grown to one or two installations a week.
The crucial factor in this increase has been the Feed In Tariff (FIT), introduced by the Labour government and continued under the coalition. When we looked closely at the figures, we soon realised that installing pv on the roof was going to be well worth the investment.
Renewable installations attract what amounts to a retrospective grant to pay for the capital outlay. In the case of small-scale pv installations, the ‘Generation Tariff’ (which rises each year with inflation) is currently 43.3p per kilowatt hour [this was the rate in October 2011 - it has since reduced substantially, supposedly 'in line with the reduction in the cost of installation']. This is paid for all the power you generate, even if you use it all yourself. Details of Feed In Tariffs generally are available on the FIT information site: http://www.fitariffs.co.uk/eligible/levels/
In addition there is an ‘Export Tariff’ paid for electricity exported to the national grid. For small scale installations this is assumed to be 50% of the power generated, and there is no requirement to install an export meter. The Export Tariff is currently 3.1p per unit, so effectively an extra 1.55p for each kWh generated.
Taken together with the cost of electricity which you no longer need to take from the grid and pay for, this often represents a return on investment of 10% or more; and since the Generation Tariff is paid for twenty five years, most installations will realise a healthy profit. And for private homes the payments are tax-free.
The money comes from the electricity supplier (not the government), and is accounted for as an overhead - which, of course, is passed on to consumers. So, in effect, those who do not take up the scheme are paying for those who do.
A domestic system with a 2kW capacity should cost around £10-12k [October 2011 - gradually coming down in price]. Our 4kW system cost £15k. Beyond that, the cost per kilowatt of installed capacity reduces progressively, as does the Generation Tariff which is paid.
It is the financial benefits which have resulted in the enormous increase in demand, for pv installations in particular. But of course the environmental benefits still hold true: solar cells mean pollution-free power generation, and a reduction in carbon emissions, as well as providing ‘energy security’ in the sense of reducing the amount of energy that has to be imported.
Looked at another way, if enough people were generating power from their roofs, nuclear power would no longer be required. Current plans for ‘Hinkley Point C’ propose two 1,600 megawatt reactors, by far the largest nuclear installation in the country; but about two million homes with pv cells on their roofs would make it unnecessary.
And from a transition point of view, the more people who install pv or other kinds of micro-generation, the more our community becomes potentiallty self-sufficient in energy - the more scope there must be for a local ‘micro-grid’, as and when this may become appropriate or necessary.
Questions
Do pv cells require planning permission?
Only if they are to be installed on non-residential buildings, on a listed building, or in an area of outstanding natural beauty. Until recently this also applied to conservation areas (which meant most of central Glastonbury) [and will do again as from December 2012].
For us the only problem with obtaining planning permission seemed to be delays due to a lack of staff in the District Council’s planning department.
Does my roof have to be south facing to make it worthwhile?
The nearer to south facing you are, the more effective your pv cells will be. Nevertheless they can be west facing and still generate sufficient power to make them worth installing (the difference will be in the order of 15%). More important is to have a high roof with nothing overshadowing it.
How do I work out how much electricity I could generate?
The key variables in calculating the generating potential of your roof are (1) the size of system which you have room for (measured in kW of installed capacity), (2) orientation (degrees from direct south), (3) latitude (Glastonbury is approximately 51 degrees North), and (4) pitch of the roof (optimum is 30 to 35 degrees).
There are various websites which include calculators to produce an estimate based on this data. Your pv installer will provide figures based on standard assumptions, ensuring that like can be compared with like. However, many systems out-perform these estimates, and it may be more realistic to also check out, for example, the PVGIS website: http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php
Is it true that pv cells don’t work during a power cut?
It is illegal to feed power into the grid during a general power cut, for obvious reasons of safety to repair engineers. PV cells work whenever there is sunshine, but the inverter (which converts the DC current coming from the cells to AC current which can be used in your house) may not. Standard inverters require a small amount of mains power to function and cut out if the mains supply fails. More complex equipment which senses a failure in mains power, continues functioning and stores excess power generated can be obtained, but at substantial extra cost.
Is it true that the ‘energy cost’ of solar panels is almost as great as the power generated during their lifetime?
PV cells have a large silicon content, which requires a very high energy input in its creation. Early designs for solar generating equipment could take twenty years or so to generate the amount of power consumed during their manufacture, though estimates for modern equipment are about four years.
What if the government changes its mind and stops the FIT scheme?
Once your application for the Feed In Tariff is accepted, payments are guaranteed for twenty five years. Politically, questions have been asked about the suitability of granting the FIT to large-scale enterprises (‘solar farms’) which have taken advantage of the scheme as a business opportunity; though currently there is no likelihood of the existing arrangements changing for domestic and small business premises. There is discussion of including micro-generation in the government’s proposed ‘Green Deal’ if it first proves to be a success in encouraging energy-saving measures, but this would not be considered for several years.
So long as the government is under pressure to reduce the country’s carbon emissions, some scheme such as the Feed In Tariff is almost certain to remain in place. The government has, however, decided to reduce the tariffs progressively for new installations put in place from April 2012 onwards, in line with expected reductions in the cost of micro-generation technology.
If I decide to sell my house before the twenty-five year period is completed, can I pass on the FIT?
Yes. Legally, micro-generation plant can either be sold along with the property or ownership can be retained by the original owner who paid for its installation. If it is sold, FIT payments can be transferred to the new owner.
How do I claim the FIT?
Once you have signed a contract for the installation of pv cells, you should inform your electricity supplier who will send you a FIT application form. This needs to be completed and returned as soon as the installation is complete, since a delay may result in a loss of FIT payments. Apart from your own details, the form asks for some technical information and your installer will probably be happy to help with filling it in.
Written for the Transition Glastonbury website, October 2011
The technology for producing electricity from sunlight has developed well over recent years. Solar energy is becoming more and more affordable and, thanks to the ‘Feed In Tariff’ scheme, it is now very much cost-effective to produce on a small scale. This scheme pays far more than the current wholesale price for selling power to the national grid.
I am one of the director-shareholders at ‘The Old Clinic’, a building in St John’s Square which provides offices and workshops for small local businesses. Recently we realised that we could no longer put off ‘doing the roof’ - it was time to replace the roofing felt, battening, and numerous cracked tiles. Why not, we thought, check out the possibility of installing phot-voltaic (‘pv’) cells whilst we were at it.
Our architect put us in touch with ‘Sunlit Solar’, a firm of local electricians who got enthusiastic about the possibilities of solar power and started installing domestic pv systems eight years ago (www.sunlit-solar.co.uk). Beginning with one or two installations a year, this side of their business has now grown to one or two installations a week.
The crucial factor in this increase has been the Feed In Tariff (FIT), introduced by the Labour government and continued under the coalition. When we looked closely at the figures, we soon realised that installing pv on the roof was going to be well worth the investment.
Renewable installations attract what amounts to a retrospective grant to pay for the capital outlay. In the case of small-scale pv installations, the ‘Generation Tariff’ (which rises each year with inflation) is currently 43.3p per kilowatt hour [this was the rate in October 2011 - it has since reduced substantially, supposedly 'in line with the reduction in the cost of installation']. This is paid for all the power you generate, even if you use it all yourself. Details of Feed In Tariffs generally are available on the FIT information site: http://www.fitariffs.co.uk/eligible/levels/
In addition there is an ‘Export Tariff’ paid for electricity exported to the national grid. For small scale installations this is assumed to be 50% of the power generated, and there is no requirement to install an export meter. The Export Tariff is currently 3.1p per unit, so effectively an extra 1.55p for each kWh generated.
Taken together with the cost of electricity which you no longer need to take from the grid and pay for, this often represents a return on investment of 10% or more; and since the Generation Tariff is paid for twenty five years, most installations will realise a healthy profit. And for private homes the payments are tax-free.
The money comes from the electricity supplier (not the government), and is accounted for as an overhead - which, of course, is passed on to consumers. So, in effect, those who do not take up the scheme are paying for those who do.
A domestic system with a 2kW capacity should cost around £10-12k [October 2011 - gradually coming down in price]. Our 4kW system cost £15k. Beyond that, the cost per kilowatt of installed capacity reduces progressively, as does the Generation Tariff which is paid.
It is the financial benefits which have resulted in the enormous increase in demand, for pv installations in particular. But of course the environmental benefits still hold true: solar cells mean pollution-free power generation, and a reduction in carbon emissions, as well as providing ‘energy security’ in the sense of reducing the amount of energy that has to be imported.
Looked at another way, if enough people were generating power from their roofs, nuclear power would no longer be required. Current plans for ‘Hinkley Point C’ propose two 1,600 megawatt reactors, by far the largest nuclear installation in the country; but about two million homes with pv cells on their roofs would make it unnecessary.
And from a transition point of view, the more people who install pv or other kinds of micro-generation, the more our community becomes potentiallty self-sufficient in energy - the more scope there must be for a local ‘micro-grid’, as and when this may become appropriate or necessary.
Questions
Do pv cells require planning permission?
Only if they are to be installed on non-residential buildings, on a listed building, or in an area of outstanding natural beauty. Until recently this also applied to conservation areas (which meant most of central Glastonbury) [and will do again as from December 2012].
For us the only problem with obtaining planning permission seemed to be delays due to a lack of staff in the District Council’s planning department.
Does my roof have to be south facing to make it worthwhile?
The nearer to south facing you are, the more effective your pv cells will be. Nevertheless they can be west facing and still generate sufficient power to make them worth installing (the difference will be in the order of 15%). More important is to have a high roof with nothing overshadowing it.
How do I work out how much electricity I could generate?
The key variables in calculating the generating potential of your roof are (1) the size of system which you have room for (measured in kW of installed capacity), (2) orientation (degrees from direct south), (3) latitude (Glastonbury is approximately 51 degrees North), and (4) pitch of the roof (optimum is 30 to 35 degrees).
There are various websites which include calculators to produce an estimate based on this data. Your pv installer will provide figures based on standard assumptions, ensuring that like can be compared with like. However, many systems out-perform these estimates, and it may be more realistic to also check out, for example, the PVGIS website: http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php
Is it true that pv cells don’t work during a power cut?
It is illegal to feed power into the grid during a general power cut, for obvious reasons of safety to repair engineers. PV cells work whenever there is sunshine, but the inverter (which converts the DC current coming from the cells to AC current which can be used in your house) may not. Standard inverters require a small amount of mains power to function and cut out if the mains supply fails. More complex equipment which senses a failure in mains power, continues functioning and stores excess power generated can be obtained, but at substantial extra cost.
Is it true that the ‘energy cost’ of solar panels is almost as great as the power generated during their lifetime?
PV cells have a large silicon content, which requires a very high energy input in its creation. Early designs for solar generating equipment could take twenty years or so to generate the amount of power consumed during their manufacture, though estimates for modern equipment are about four years.
What if the government changes its mind and stops the FIT scheme?
Once your application for the Feed In Tariff is accepted, payments are guaranteed for twenty five years. Politically, questions have been asked about the suitability of granting the FIT to large-scale enterprises (‘solar farms’) which have taken advantage of the scheme as a business opportunity; though currently there is no likelihood of the existing arrangements changing for domestic and small business premises. There is discussion of including micro-generation in the government’s proposed ‘Green Deal’ if it first proves to be a success in encouraging energy-saving measures, but this would not be considered for several years.
So long as the government is under pressure to reduce the country’s carbon emissions, some scheme such as the Feed In Tariff is almost certain to remain in place. The government has, however, decided to reduce the tariffs progressively for new installations put in place from April 2012 onwards, in line with expected reductions in the cost of micro-generation technology.
If I decide to sell my house before the twenty-five year period is completed, can I pass on the FIT?
Yes. Legally, micro-generation plant can either be sold along with the property or ownership can be retained by the original owner who paid for its installation. If it is sold, FIT payments can be transferred to the new owner.
How do I claim the FIT?
Once you have signed a contract for the installation of pv cells, you should inform your electricity supplier who will send you a FIT application form. This needs to be completed and returned as soon as the installation is complete, since a delay may result in a loss of FIT payments. Apart from your own details, the form asks for some technical information and your installer will probably be happy to help with filling it in.
