Solar power in the UK was given a kick-start in 2008, when the Government began offering large subsidies for those willing to install roof-top panels. They recognised from the outset that not enough people could afford the up-front installation of solar panels – around a £20,000 exercise at the project’s inception – but hoped it would be enough to help blossom the industry into something a little less ‘niche’.
Now, more than 800,000 UK homes wear solar panels on their roofs and installation can cost as low as around £6,000.
Last year, the UK Government cut the tariffs solar-powered homeowners received from 41.6p per unit of electricity to 12.5p; this was done to match the marked decrease in panel installation costs.
How will the UK solar industry cope?
The tariff cuts were reduced again by 65% in January, just days after the Paris climate talks. Critics of the cuts are certain the death knoll has been rung for solar power in the UK despite the cost of installation being lower than ever.
In February and March this year, the amount of solar power installed in the UK fell to 25% of its previous levels; this is immediately following the tariff cuts. A drop was feared – even expected – but nothing to this level.
So far it is unclear whether the immediate drop in solar installations will be a continuing trend, or if it will rectify itself in time.
David Pickup of the Solar Trade Association was optimistic, putting the marked drop in deployment down to the possibly temporary closure of “a handful of businesses” immediately following the tariff cut. He is sure that the days of solar power aren’t over, as the advances made over the past few years will allow the market to “recalibrate by selling solar as a package with other smart cutting edge technology”; solar power, then, will continue as a luxury good.
How will the Government maintain the renewable energy movement?
Earlier, we described how the tariffs on solar power were originally introduced to speed the uptake of solar panels. It seemed like it was all over before the technology cheapened enough for the whole country to get on board. In a surprising turn of events, recent statistics show that there are nearly a million UK installations of solar panels – which are now available from Ikea – and the power being drawn from them is exceeding expectations.
In May this year, solar power outperformed coal in supplying energy to British homes for a full week. This is the first time it’s ever happened. However, we can’t thank the inherent excellence of solar power for this; the truth is that coal has been collapsing as an energy source for some time. Non-renewable energy is increasingly expensive and difficult to obtain.
Can private companies drive the industry forward?
The Green Investment Bank
Since 2012, the Green Investment Bank (GIB) has been run by a team of experts with UK Government funds. It invests in renewable energy and green technology with the aim of “financing the modernisation of the UK’s energy and waste sectors,” along with smaller initiatives.
However, the GIB is undergoing a change in ownership. In March last year they announced their intention to sell to private sector investors. When explaining the decision to sell, Lord Smith of Kelvin, the GIB’s independent chair, said that “attracting new investors is vital if GIB is to… double the size of its business”.
While more funding is never a bad thing – especially with regard to the development of new technology – there is concern that those who purchase the GIB will not feel the same social responsibility of a Government-funded investment fund.
With solar power holding its own against coal and the burgeoning popularity of wind turbines, private companies are pushing ahead with renewable technology. Not only is there an environment to be saved; there’s money to be made.
Despite falling oil and gas prices, a record amount of money was invested in renewable energy in the UK last year. Alternative energy is ripe for innovation and development: companies like Dulas and Res could continue to grow for many decades.
Investment in renewable energy is financially smart, environmentally friendly, and easily done.
The smart energy investor is an ethical one.
Critics of the solar energy incentive tariff believed it was unfair for taxpayers’ money to benefit the electric bills of households that are already well-off.
However, if less than a decade of Government subsidisations of energy can give coal a run for its money this quickly, imagine the success future investments – both by the Government and private companies – could have.
Are you considering investing in renewable energy in the future? Why not get in touch to discuss the range of investments we’re able to offer?