Anyone even vaguely familiar with the solar power industry in the UK will be well aware of what has been happening over the past few months with the feed in tariff mechanism which supports small renewable power systems (up to 5MW). All the same I wanted to put forth my own assessment across in my next two posts to bring SIEAS up to date (more or less).
The first deals with the fast track review that looked only at larger PV systems. The second will basically call the government a bunch of fuck-ups for their incompetent handling of the October-December wider review. It may occasionally be sweary.
Back in March, the government began a review of the tariffs for larger PV systems. Costs had dropped to the point that megawatt (MW) scale installations, often ground mounted and feeding the grid directly rather than supplying on-site users were becoming attractive and threatening the overall economics of the feed in tariff programme (the de facto cap on FIT spending imposed by the Treasury is another story for another time).
Were they right?
Well, from a simple viewpoint, yes.
MW scale solar schemes stood to make hundreds of times more than a typical household system, hardly surprising given they are hundreds of times larger.
At these sizes, there are huge economies of scale. Installers are only dealing with one landowner, buying modules and other equipment in bulk and cutting out costs for roof access (scaffolding or cranes).
So, big PV systems are cheapest but they lose some of the key non-monetary benefits of solar power. When installed on a roof, PV produces power where needed and avoids conflict over land use. That said, my personal view is that a few more big PV systems would be a small price to pay for helping create the solar industry which can help us off fossil energy in the long term.
The first of two big changes in the FIT scheme for PV coming from this consultation was a new set of bands for smaller ‘large’ systems, one for 50 to 100 kW and a second from 100 to 150 kW and a third from 150 to 250 kW.
Now, the government has been keen to play up that a 50 kW system is just enormous, covering an area the same as two tennis courts. But what if I have a large factory with a load of underused roof? I could easily fit close to a MW of solar on a factory, heck the renovated Blackfriars station is getting a 1 MW solar roof and that’s not even a large train station. I’m not saying they cannot justify the 50 kW threshold but to claim this is the point at which you go from a sensible size to carpeting Cornwall is pretty silly. On the other hand, perhaps there should always have been a 50-250 kW and a 250 kW – 5MW band in the scheme.
In their justification for reviewing the tariffs, DECC stated that costs had fallen by a third since the scheme had been introduced. This is basically true so you’d think the tariffs need to be dropped by about a third, from around 30 p/kWh to around 20. Maybe to 16-18 to futureproof a little. Well, that’s exactly what we got for the 50-250 kW bands which are now 19, 19 and 15 p/kWh respectively.
Then a little further down the consultation came the strange proposal for the 250+ kW tariff to be 8.5 p/kWh. A strange proposal because this rate reflects the cost of electricity from offshore wind . Erm, Feed-In Tariff? That’s for feeding into the grid from technologies which need subsidy to be economic at present right? So how come you are giving a Wind rate to PV? You may as well give a Hydro rate to Anaerobic Digestion or have no technology distinction at all and just pay everyone the wind rate of 8.5 p/kWh. Only that would have the same effect as no FIT at all. Nobody would invest in anything more costly than offshore wind.
Incidentally, the other support scheme for larger renewables, the FIT would actually make you more money on a 250+ kW system though the investment risk and administration are more complex so you might not get any better return on your investment.