What is biomass energy?

Biomass is biological material derived from living – or recently living – organisms. In the context of biomass energy, this is often used to mean plant based material, but biomass can equally apply to both animal and vegetable derived material. The carbon used to construct biomass is absorbed from the atmosphere as carbon dioxide (CO2) by plant life, using energy from the sun. Plants may subsequently be eaten by animals and thus converted into animal biomass, but the primary absorption is performed by plants. This is however the basis of biomass energy, which in essence is the capture of the sun’s energy that is stored in living organisms.h

Fossil fuels on the other hand offer high energy density, but making use of that energy involves burning the fuel, with the oxidation of the carbon to carbon dioxide and burning the hydrogen to produce water (vapour). Unless these emissions are captured and stored (see CCS), then these combustion products are usually released into the atmosphere, returning carbon sequestered millions of years ago and thus contributing to increased atmospheric concentrations.

How is biomass energy different to fossil fuel energy?

The vital difference between biomass and fossil fuels is one of time scale. Biomass takes carbon out of the atmosphere while it is growing, and returns it back to the atmosphere as it is burned. If it is managed on a sustainable basis, biomass is harvested as part of a constantly replenished crop. Forms of replenishment are as follows: (1) woodland or arboriculture management or (2) coppicing or (3) as part of a continuous programme of replanting with any new growth taking up CO₂ from the atmosphere. This maintains a closed carbon cycle with no net increase in atmospheric CO₂ levels, which means the release into the atmosphere by combustion is absorbed by new growth.

Biomass energy for your business

The main difference between biomass boilers and fossil fuel-fired systems is that biomass energy systems are larger. The heating system itself works in a very similar way to a conventional system. A biomass energy system typically consists of the following: a boiler, control system, mechanical system (pipes, valves, flues etc.), infrastructure to receive and store fuel and infrastructure to transfer it to the main boiler unit.

Heat energy

Biomass energy is extracted using biomass fuel, which is burnt in a combustion chamber and the heat is then used to heat water. This hot water then heats the building through a normal hot water heating system. Steam can also be used in industrial processes where appropriate, and hot air is sometimes used for space heating. However unlike electricity generation, which is subsidised by the ROCs, the Renewable Heat Incentive (RHI) is not yet in place to help subsidise district renewable heating solutions.

Electricity

For generating electricity, the steam produced can be used to power turbines, which then runs an electric generator and creates power. As biomass energy is part of the renewable fuel grouping for electricity generation, users can now also benefit from Renewables Obligation Certificates (ROCs), which are received at a prescribed level for every MWh of power generated.

Biomass energy plants can vary from being small, manually-fed systems with basic controls, to fully automatic systems with advanced controls and remote monitoring. You should always consider fuel availability and consistency, as well as storage and handling, during the design, implementation and operation stages. Of all possible renewable heating solutions, biomass energy has the potential to deliver some of the most significant and cost-effective carbon savings, particularly for commercial and industrial applications. In addition to carbon savings, biomass energy also offers significant benefits for users, including operational fuel cost savings and reduced fuel price volatility.

A biomass energy plant in a small town or village for example can stimulate local economic activity by creating fuel supply chains and making good use of resources that would otherwise be treated as waste and sent to landfill.

ROCs for biomass energy electricity generation

As mentioned in the previous section if you have a biomass energy system, then depending on the power output, the system can be eligible for ROCs if the plant generates electricity. The precise number of ROCs depends upon the biomass generation type. According to the Department for Energy and Climate Change (DECC), if the electricity generated is partly from fossil fuel and partly from biomass, then it is entitled to 0.5 ROCs per MWh. Dedicated biomass generation is applicable for 1.5 ROCs per MWh. The use of energy crops mixed with fossil fuel or CHP (cogeneration) process entitles the generator from 1 ROC to 2 ROCs depending on the mixture. Pure energy crop electricity entitles the generator to 2 ROCs per MWh.

How suitable is biomass energy for my business?

• Do you have any planning exclusions, e.g. vehicle movements, visual intrusion, noise restrictions or limitations on chimney heights?
• Is there enough space for lorries to regularly deliver the fuel?
• Do you have sufficient space for the larger boiler and a fuel store?
• Do you have the capital to invest in such a system? Biomass energy solutions tend to have higher capital costs than fossil fuel-fired systems, but can attract financial support schemes.

Sourcing fuel for biomass energy

The three most common types of commercially available biomass fuels are wood-based (logs, woodchips and pellets). However, other fuels such as straw are also used as part of the biomass energy grouping.

Biomass energy fuel supply needs to be sustainable in principle, so that the renewable credentials are maximised. You should diversify the scope by purchasing biomass fuel from many suppliers, and you can make long-term agreements to secure a fixed price into the future. If you can source the fuel locally then you will also have more control over the security of your supply.  This will also increase your on-site storage giving you that buffer against short-term supply problems.

It is common practice to undersize the biomass boiler and to include a thermal store (large hot water tank). This helps to smooth the heat demand profile and ensures that the biomass boiler runs for long hours at high load. An auxiliary fossil fuel fired boiler is then used to cope with peak loads. This multi-fuel strategy gives greater security against fuel problems too, but is not as good for the environment.

Industry policy trends for Biomass Energy

The take up of biomass energy in electricity generation in the UK, and its long-term outlook, is mixed. For example, companies like Drax Power and E.ON have moved away from their initial enthusiasm for expansion, which has been due to uncertainties, driven by the outcome of the Renewables Obligation (RO) review. However, the government has signalled on more than one occasion that the banding will expand, so as to further support CHP initiatives. For this reason the industry is waiting for more details to emerge on the Renewable Heat Incentive – due to launch later in 2012 / early 2013.

Benefits

• Return on your investment in three years if the biomass replaces electric, fuel oil or LPG.
• Net carbon emissions per kilowatt hour (kWh) are much lower than energy sources from fossil fuels. E.g. The carbon emissions for woodchip are 10-23kg of CO2 per megawatt hour (MWh), compared to 263-302kgCO2/MWh for natural gas.
• Biomass systems are relatively easy to convert to other fuels and offer greater flexibility for an uncertain energy future.
• In some regions biomass are considered waste products; burning them for energy can reduce disposal costs and free up landfill sites.

Limitations

• Biomass plant will typically cost two to five times as much as an equivalently sized fossil fuel system.
• The payback won’t be quite as fast if you’re replacing natural gas.
• Larger size boiler and the storage and handling equipment needed.
• Burning biomass usually takes more operator attention then burning conventional fuels.
• In contrast to other fuels, biomass fuel is variable in quality. It may require more vigilance and effort from the owner to ensure the desired fuel quality.

What is solar PV?

The process of converting light (photons) to electricity (voltage) is called the solar photovoltaic (PV) effect. Photovoltaic solar cells convert sunlight directly into solar power (electricity). They use thin layers of semi-conducting material that is charged differently between the top and bottom layers. The semi-conducting material can be encased between a sheet of glass and/or a polymer resin.

When exposed to daylight, electrons in the semi-conducting material absorb the photons, causing them to become highly energised. These move between the top and bottom surfaces of the semi-conducting material. This movement of electrons generates a current known as a direct current (DC). This is then fed through an inverter, which converts the power to alternating current (AC) for use in your home.

Types of solar panel

Different types of solar PV installations require slightly different components. However in the next two sections we have explained in detail all the main components that will make up your solar PV array and provide you with 100% renewable, free electricity.

The solar panel is the key component of any solar photovoltaic system, which takes the sun’s energy and converts it into an electrical current. There are three main types of solar panel (as well as the hybrid version) currently in commercial production, all of which are based on silicon semiconductors:

Monocrystalline solar cells

This type of solar cell is made from thin wafers of silicon cut from artificially-grown crystals. These cells are created from single crystals grown in isolation, making them the most expensive of the three varieties (approximately 35% more expensive than equivalent polycrystalline cells), but they have the highest efficiency rating – between 15-24%.

Polycrystalline solar cells

This type of solar cell is also made from thin wafers of silicon cut from artificially grown crystals, but instead of single crystals, these cells are made from multiple interlocking silicon crystals grown together. This makes them cheaper to produce, but their efficiency is lower than the monocrystalline solar cells, currently at 13-18%

Amorphous solar cells

These are the cheapest type of solar cell to produce, are relatively new to the market and are produced very differently to the two other types. Instead of using crystals, silicon is deposited very thinly on a backing substrate.

There are two real benefits of the amorphous solar cell; firstly the layer of silicon is so thin it allows the solar cells to be flexible, and secondly they are more efficient in low light levels (like during winter).

This, however, comes at a price; they have the lowest efficiency rating of all three types – approximately 7% – 9%, requiring approximately double the panel area to produce the same output. In addition, as this is a relatively new science, there is no agreed industry-wide production technique, so they are not as robust as the other two types.

Hybrid solar cells

This is not a type of solar cell in its own right; instead it is a combination of both amorphous solar cells and monocrystalline solar cells. These are known as HIT solar cells (Heterojunction with Intrinsic Thin Layer – a bit of a mouthful!), and have higher efficiency ratings than any of the other three types of solar cell alone. In addition, they are also better suited in sunnier climes, where temperatures often exceed 25⁰C, creating up to 10% more electricity.

We think in many cases polycrystalline cells are the most suitable option, as they provide value for money while still also being relatively efficient.

Future solar technologies

• Research is currently underway to develop almost 100% transparent solar glass, which can be used in building applications. Organic polymer photovoltaics will be ultra-thin and more efficient than existing types, and could see windows transformed into electricity generators!
• Perovskite is a new type of solar cell which is more efficient than current types on the market. The technology is currently in refinement, as it has a number of flaws which would need to be resolved before it could be mass-produced.

Solar PV inverters

All the electricity produced by the solar panels is produced as direct current (DC), which differs from the electricity that is distributed through the grid and we use in our homes, which is alternating current (AC). For this reason most solar photovoltaic systems are now connected up with some type of inverter, which changes the DC to AC, allowing the individual to sell the electricity back to the grid (in grid-tied systems) or to be used easily in homes.

There are 2 major types of inverter that can be installed in your solar photovoltaic system:

1. String inverters (also known as central inverters)

These are used in grid-tied systems where the solar panels are wired together in series, which is known as a string of panels. Each string of panels is connected to a string inverter, which converts the DC current to AC for use in the home and selling back to the grid. You can imagine each string as a mini power station, producing electricity.

The main issue with string inverters is that if one of the panels in the string fails or produces less electricity (from things like shading), this impacts the output of all the panels. They will all operate at the output of the worst panel, so a small amount of shading or debris on your solar array can disproportionally reduce the total output of your entire solar photovoltaic system.

They also have relatively short lifespans when compared to micro inverters.

The benefits include simple wiring and that you can use thinner wires within your solar PV system, so less copper is used which makes the system cheaper. Buying one string inverter (which is normally the case of most home solar PV systems) is also considerably cheaper than buying multiple micro inverters.

2. Micro inverters

These are a newer technology and service each solar panel individually, so each panel requires its own micro inverter and acts as an individual power station.  As a result, micro inverters do not suffer the same performance reduction as a result of shading because any power reduction in a particular solar panel is handled by one micro inverter, having little effect on the combined power output from the entire solar photovoltaic system.

Micro inverters are much more expensive than the string inverters. However much of this cost is offset by the increased performance (25% more power produced using micro inverters) and the fact that they are more reliable than string inverters (warranties for micro inverters are up to 25 years).

Buying inverters for your solar PV system

When looking for which inverters to buy, ideally you want your alternating current (AC) to match that provided by the utility companies. Waveform relates to the quality of the AC signal that an inverter produces. Cheaper inverters will provide modified sine wave signal, while the more expensive versions will produce the pure sine wave signal. Some appliances (such as computers) simply don’t work unless they are powered by a pure sine wave signal, so we recommend strongly that you spend a little more to get this type of inverter.

Grid tie inverters differ slightly from your regular inverters in that the AC pure sine wave signal has to be perfectly coordinated with the waveform from the grid. As such, these tend to be more expensive than the typical inverters that you buy. They also have a built-in safety feature to cut off power from the solar array if the electricity grid goes down for any reason.

It is also worth noting that most inverters now also have ‘Maximum Power Point Tracking’ (known as MPPT) installed within them, which helps to maximise the electrical output of your solar photovoltaic array system.

The principle of MPPT is to extract the maximum available power from the photovoltaic module by making them operate at the most efficient voltage (known as the maximum power point voltage). The algorithm included in the MPPT inverter compares the output from the photovoltaic module with grid voltage and then fixes it at the most efficient voltage, to allow you to export the maximum amount of kWh of electricity back to the grid. An MPPT charger in your solar photovoltaic system will improve your power gain by 20-45% in the winter and 10-15% in the summer.

Benefits

• All solar PV panels are rapidly decreasing in price due to better production techniques and increased competition between manufacturers and suppliers.
• Monocrystalline solar PV cells are the most efficient type of solar PV cell (rated between 15-24%), so smaller panels can produce equivalent amounts of electricity compared to other solar cell types.
• Polycrystalline solar PV cells are easier to produce than the monocrystalline solar PV cells and therefore cheaper to buy, still providing decent efficiency levels (13-18%).
• Amorphous solar PV cells are the easiest to produce and as the silicon is deposited on any surface, these panels can be made into any shape.
• Hybrid solar PV combine amorphous and monocrystalline cells giving you the advantages of both of these two types of solar cell.

Limitations

• Polycrystalline and amorphous solar PV cells are less efficient than monocrystalline, and therefore bigger panels are needed to produce the equivalent electricity output.
• The technique for building monocrystalline solar cells is more difficult and this is reflected in the higher price of this type of panel.

The battery

One of the major issues with solar PV systems is that they only produce electricity when the sun is shining. If you are looking to go ‘off-grid’ or have battery back up in times of grid blackouts, you will need batteries within your solar PV system.

In these systems, electricity produced from the solar cells is either used in the home as required, or if there is no demand in the home, it is converted to chemical energy in the form of batteries. These batteries can then produce the electicrity at night to allow you to use your solar PV system ’24/7′.

The electricity produced by your solar system is stored in deep-cycle lead acid batteries that look very similar to the ones found in most cars today (although structurally different). The two most popular types of battery are GEL and Absorbed Glass Mat (AGM), which store the charge very well and do not degrade nearly as fast as the common lead acid (wet cell) battery. Both types of batteries are designed to gradually discharge slowly and recharge 80% of their capacity a multiple number of times.

An automotive battery is a shallow-cycle battery, and this is designed to discharge only about 20% of its electricity so is unsuitable for solar photovoltaic set-up. The reason being is that if any more than 20% is drawn more than a few dozen times, it will get damaged and no longer take charge.

Solar photovoltaic batteries tend to operate at 12 volts, and can be arranged in banks (multiple batteries), increasing the storage potential of your solar photovoltaic set up. A bank of batteries organised in a series increases the capacity of your storage but also increases the voltage delivered from your bank, while multiple batteries organised in a parallel circuit increase the capacity, but keep the voltage the same (mains electricity runs at higher voltage, so if you have a grid tie system it is likely you will try to match this by running the batteries in series).

Solar Charge Controllers

Solar Charge Controllers (also known as Solar Charge Regulators) are used in solar photovoltaic systems to prevent the batteries from being overcharged. If you decide to implement a ‘grid-tied’ system, a solar charge controller is not necessary, as any excess electricity that you don’t use at any particular moment is sold directly back to the grid.

However, for any of the other three setups, a charge controller is necessary; it acts to regulate the flow of electricity between the solar photovoltaic modules, the batteries and your appliances (known as the load).

When the load is drawing power (e.g. you are watching television), the charge controller allows electricity to flow from the solar panels directly (if the sun is shining), or from the battery, or from a mixture of the two. The charge controller also prevents damage to the battery by monitoring the flow of electricity in and out. For instance if your system overcharges the battery, it will damage them. The same is also true if you completely discharge all the charge held within the battery.

At night, when the solar units are no longer producing electricity, the solar charge controller prevents reverse current flowing from the batteries back into the solar panels.

Solar charge controllers also are equipped with highly effective charging programs that maximise the charging speed, while still preventing overcharging.

Most are also equipped with maximum power point (MPPT) charging. The principle of MPPT is to extract the maximum available power from the photovoltaic module by making them operate at the most efficient voltage (known as the maximum power point voltage). The algorithm included in the MPPT solar charge controller compares the output from the photovoltaic module with the battery voltage and then fixes it at the best charging voltage, to get the maximum charge into the battery. The maximum power produced by the solar photovoltaic module is dependent on the amount of sun hitting the solar cells and the temperature of the cells. Incorporating a MPPT charger into your solar photovoltaic system will improve your power gain by 20-45% in the winter and 10-15% in the summer.

Solar array mounting

As discussed earlier, the amount of power that your solar photovoltaic system produces is dependent on the intensity of light hitting your solar array. There are three types of mounting you can get for your solar panels to help maximise the amount of light that they receive.

Fixed solar array mountings

These are the simplest of all the mounting systems, and also the cheapest. In this system, the solar panels will not move at all at any time during the year, so you want to ensure that when you put in the panels they are facing the equator to maximise sunlight.

Manually adjustable solar mountings

These can be changed a few times a year to adjust for the winter and summer sun. The sun is highest in the sky during the summer months and lower in the winter, so by being able to adjust the angle of your solar array ensures that the sunlight hits the array at the best angle to avoid reflection.

Fully automated tracking solar mount

These mountings track the sun, to ensure that at all times the angle of the solar array is maximising sunlight. These are certainly the most expensive type as they are constantly moving, but they are also by far the most efficient. Despite this, it has been proven to be more cost effective to add an extra solar panel to your array and use the fixed or adjustable mountings.

Installing Solar PV

Are you thinking about installing a solar PV system at home? We have scoured the country for the best tradespeople, so that we can make sure we only recommend those we really trust.

If you would like us to find you a local installer to help install a solar PV system in your home, just fill in the form below and we will be in touch shortly!

Each solar setup has its own benefits and limitations, and it is important to gain a real understanding of these before you invest in a potentially expensive solar PV system, to help avoid disappointment further down the line.

Grid-tied solar PV Systems

99% of solar systems installed on people’s homes in the UK are what’s known as ‘grid-tied’ systems. These grid-tied systems allow you to use the free electricity you create from the solar PV system, as well as electricity from the National Grid. This gives you flexibility, since you have a constant supply of electricity, whether or not the sun is shining.

Any shortfall in supply from your solar PV array can be met by additional electricity supplied via the grid, but there is also the added benefit of being able to sell any surplus back to the grid. In essence, a grid-tied system will go some way to reducing your dependence on the utility companies, and also save you money, while still giving you the comfort of as much electricity as you need from the grid. The lack of batteries also makes this type of solar setup cheaper to install.

Grid-tied solar PV installations have become incredibly popular in the UK recently due to generous government subsidies (guaranteed for 25 years from the date of installation).

Solar PV home battery storage

Read more

Off-grid/standalone solar PV systems

Producing 100% of your own electricity in a clean and sustainable manner is the dream scenario for many people; the thought of never paying another electricity bill, and never suffering from grid blackouts is obviously a very attractive proposition.

However, an off-grid system does not need to be very sophisticated and grand in scale – it can simply power a light in your garden shed, or a water fountain in your garden. For this reason, off-grid installations are the most common type of solar installation across the globe, providing electricity to any isolated location (normally where no other electricity source is readily available).

The disadvantage is that you essentially become the utility company, so any costly repairs fall under your remit. Also, if there is a problem with your supply for any reason, you will not have electricity. Solar power is also an intermittent source (i.e it doesn’t power 100% of the time), so if you need electricity during the night (for lighting etc), you will need to install batteries within your system. These enable you to store energy during the day and use it when you are not generating.

The rewards for installing an off-grid system are clear; however the increased responsibility of owning your home’s electricity supply could make this kind of system a potentially daunting task for solar PV beginners.

Grid-tied with battery backup systems

The issue with this system is its added complexity compared to the grid-tied solar PV system described above. The batteries will require additional maintenance and add significantly to the final cost, and they will also introduce additional inefficiencies within your system – potentially a 15% loss in overall performance.

Grid fallback systems

This is where electricity is taken from the batteries and run through an inverter to provide the electricity required in the home. Once the batteries begin to go flat, the system automatically switches over to grid power, allowing the solar panels to once again charge the bank of batteries, and the process starts again.

Installing Solar PV

Are you thinking about installing a solar PV system at home? We have scoured the country for the best tradespeople, so that we can make sure we only recommend those we really trust.

If you would like us to find you a local installer to help install a solar PV system in your home, just fill in the form below and we will be in touch shortly!

As part of the Green Deal, I am going to a lot homes at the moment and solar PV tends to come up a lot. People are unsure about how the numbers stack-up, they have heard in the news about the recent drop in the Feed-in-Tariff payments, but they are also aware that energy prices are going up substantially every year. So is getting solar PV installed on your home still worth it?!

In a word – Yes!

But the speed of payback is actually fairly dependant on when you use the energy, as you will see in a minute. So here goes and if you want to query any of the numbers, please drop a comment at the bottom of this post. A typical system is about 3.6kW (3,600 watts) in size, which will cost you approximately £6,000.

How much electricity will your Solar PV system Generate?

If you take this figure (or the size of the system you are interested in getting – obviously the bigger it is the more electricity it can produce) and multiply it by 0.8 it will give you the approximate number of kWh the system produces in a year, so in this case a 3.6kW system would work out as follows.

So 3600 x 0.8 = 2880kWh

To give you a rough guide, the average home uses about 4,800kWh each year, although your energy bills will reveal what you actually use.

The Generation Tariff – payment for every kWh of electricity produced

As part of the Feed-in Tariff, the Energy Suppliers are obliged to pay you 15.44 pence for every unit of energy you produce, regardless of what you do with it – this is known as the Generation Tariff and is guaranteed for 20 years, i.e. regardless of whether the FiT drops over the coming years, you will get this payment of 14.90 pence for every kWh you produce.

2880kWh x 14.38 pence = £414.14

But there is more!!

The Generation Tariff is only half the story!

Now unfortunately, as anyone who has done GCSE science will be able to tell you, it is not possible to store electricity so you can either use the electricity as it gets produced by the solar PV system or you can export it back to the electrical grid (you have have battery back-up, however in the UK 99% of homes with Solar PV have grid-tied systems).

The final payback of the system is dependant on the ratio of using the electricity in the home compared to the amount exported.

The Export Tariff – payment for every kWh of electricity exported

For every kWh produced and sold back to the grid you get 4.77 pence (this is known simply as the Export tariff), but for every kWh you can use in the home, it means you don’t need to buy it from the grid at approximately 15.32 pence / kWH.

I hope you can see therefore that it is about 3 times better (financially) to use the electricity you produce rather than export it back to the grid.

Having said all that – it is worth bearing in mind that most residential solar PV systems installed in the UK don’t come with a export meter, so they will simply half the generation meter reading and assume you export that this – this means you will be paid as if you exporting 50% regardless of whether you use all the electricity in the home or none of it.

As a result of this – in an ideal situation you would use 100% of the electricity in the home and you would still be paid as if you were exporting 50% of it to the grid – so a nice little bonus!

In the scenarios below however, I am going to include the export calculations as if you have an export meter, since the move to smart meters will unfortunately remove this nice little bonus!

Maximising the return from your Solar PV investment

So the key here is obviously to have lots of panels, all facing south, and use every kWh of electricity that they produce, however in most cases this simply isn’t feasible.

Imagine being at work all day, your solar system is producing lots of electricity, but you aren’t there to use it. Conversely, a stay at home mum would be much better placed to use all the electricity.

So in the next section I am going to look at 3 scenarios which will determine the amount of electricity a household can use in the home and how much they need to sell (remembering you can’t store the electricity), and therefore their total yearly return from installing a 3.5kW solar system within their home.

Scenario 1 (Parents both working, children at school)

In this scenario, it makes sense that the family will only be able to use their energy early in the morning and when they get home in the evening (obviously they can set washing machines / dishwashers to run as they leave the house), but lets say they use 25% and sell 75%.

Export tariff – 75% x 2880kWh x 4.77 pence = £103.03

Saving on Energy Bill – 25% x 2880kWh x 15.32 pence = £110.30

Total Yearly Return = £414.14 + £103.03 + £110.30 = £627.47

Scenario 2 (1 Stay at home parent, other at work and children at school)

In this scenario, while parent at home will use a decent proportion of the electricity produced, it will be nowhere near the usage if all the family where at home at the weekend for example. In this example lets say usage is about 50% and therefore 50% needs to be sold back to the grid.

Export tariff – 50% x 2880kWh x 4.77 pence = £68.69

Saving on Energy Bill – 50% x 2880kWh x 15.32 pence = £220.60

Total Yearly Return = £414.14 + £68.69 + £220.60 = £703.63

Scenario 3 (retired grandparents at home for the majority of the day)

In this scenario, the vast majority of the electricity that is produced will be used in the home, so I am going to use the ration 80:20.

Export tariff – 20% x 2880kWh x 4.77 pence = £27.47

Saving on Energy Bill – 80% x 2880kWh x 15.32 pence = £352.97

Total Yearly Return = £414.14 + £27.47 + £352.97 = £794.58

Maximising your solar PV return

It goes without saying that the bigger your solar array, the more electricity it will produce, but how else can you be sure you are maximising your return?

Orientation of the panels

Solar panels in the northern hemisphere perform best when facing due south. This ensures that they receive the maximum exposure from the sun as it travels east to west. There is little point putting solar panels on a north-facing roof, so you may need to install them on a solar array mounting on the ground to ensure you can get the panels angled in a southerly direction.

There are different types of solar array mounting, but you can get fully automated tracking solar mounts. These mountings track the movement of the sun to ensure that the angle of the solar array is maximising exposure to sunlight at all times. These are expensive, but they also make sure you are getting the best yield.

Casting shadows on your solar PV array

It is important to ensure that shadows won’t fall on the solar panels during the peak sunlight hours, as this will obviously adversely affect the output of your solar system.

The effect of shadowing is amplified if your solar PV array has been set up with string inverters. In this setup, each panel is connected to the next panel in a series of strings, with each panel feeding a DC current to the inverter. When a cell underperforms, bypass diodes reroute the current around the underperforming cells. The problem is that rerouting the current loses not only the potential energy from these cells, but also lowers the entire string’s voltage.

The inverter then has to decide whether to optimise the voltage of the underperforming string or maximise the energy harvest from the unaffected strings. Normally the inverter chooses to optimise the voltage of the underperforming string, causing the performance of the whole string of panels affected to drop significantly. Just 10% shading of a solar PV panel can result in a 50% decline in output in this type of setup.

Solar arrays with micro inverters do not suffer anywhere near as badly from shading compared to the arrays with string inverters.

As a result of the shading issue, it is important to ensure that shadows won’t fall on the solar cells during peak sunlight hours as this will obviously adversely affect the output of your solar system. It is also important to have the foresight to predict tree growth in the coming years, as solar panels should go on producing electricity for 25 years; therefore trees that are currently of no concern could very easily grow to sufficient size in 15 years to cast shadows, diminishing the power producing capability of the solar photovoltaic system.

Keeping your solar panels clean

The operating efficiency of a solar PV panel is dependent on the amount of sunlight that hits it, so if you panels are covered in dirt they are going to produce less electricity. It is suggested to wash your solar panels 2-3 times per year for maximum efficiency. We cover the various techniques for cleaning your solar array here.

You should also coat your solar panels with protectant to reduce reflection and increase transmissivity.

Ambient temperatures of the panels

One of the key factors impacting the amount of electricity your solar panels produce is the temperature at which they operate. It is easy to presume more sun and therefore heat results in more electricity but this is wrong. Different solar panels react slightly differently to the operating ambient temperature, but in all cases the efficiency of a panel will decrease as the temperature increases.

The negative impact of temperature on solar panel efficiency is known as the temperature coefficient.

Solar panels are power tested at 25⁰C, so the temperature coefficient percentage illustrates the change in efficiency as it goes up or down by a degree. For example if the temperature coefficient of a particular type of panel is -0.5%, then for every 10C rise, the panels maximum power will reduce by 0.5%.

So on a hot day, when panel temperatures may reach 45⁰C, a panel with a temperature coefficient of -0.5% would result in a maximum power output reduction of 10%. Conversely, if it was a sunny winter’s morning, the panels will actually be more efficient.

It is therefore really important to maximise airflow around the panels to try to keep them cool so their efficiency isn’t negatively impacted. Rather than installing panels flat against your roof, you could try lifting them slightly to allow air to circulate underneath.

Use more of the electricity in your home

As mentioned in the solar PV costs section, it is best to use the electricity you produce from your solar PV array in your home, since that means you don’t need to buy it at 15p from the electricity company. Selling the electricity back to the grid means you are eligible for the export tariff which is only 4.5p/kWh.

One way to do this is with a solar diverter. These send excess energy that isn’t being used by your appliances to your immersion heater instead, helping to heat your water.

You can also make behavioural changes to ensure that you are using as much of your self-generated energy as possible. It is worth changing some of your energy usage behaviour. For example, it is better to run washing machines and dishwashers during the day – so set them to start as you leave for work.

The other way to use all the electricity you produce is by incorporating batteries into your solar PV array. Batteries will increase the upfront cost of your array and will require maintenance, but can be really worthwhile in the long run. Any electricity you produce during the day can be stored in the batteries and then used as and when you require it.

Final thoughts on investing in a solar PV system

Having received quotes for solar PV installation, you need to run the numbers to see if it makes financial sense for you to invest. It is important to bear in mind though, that solar photovoltaic arrays are modular, therefore new panels can be introduced at later dates as finances allow, further increasing the electrical output potential of your system.

Installing a solar photovoltaic array on your property should not be solely a financial decision though; you should also take into account energy security.

As demand for electricity in the UK continues to increase, the supply side is not keeping up. Over the next 3 years, 8 of the UK’s coal power plants are going to close, due to EU legislation on emissions, and by the end of the decade some of our nuclear capacity is also due to be decommissioned. Experts have predicted that the UK could face blackouts in the next few years.

A solar photovoltaic system can therefore reduce your reliance on energy companies, helping to minimise the impact of energy scarcity on you and your family in the future.

Installing Solar PV

Are you thinking about installing a solar PV system at home? We have scoured the country for the best tradespeople, so that we can make sure we only recommend those we really trust.

If you would like us to find you a local installer to help install a solar PV system in your home, just fill in the form below and we will be in touch shortly!

What are CHP boilers?

Combined heat and power (CHP) boilers produce both heat and electricity in one single process. This process is sometimes referred to as cogeneration and the technology that supports it has been around since the 1970s, but has mainly been confined to industry and large dwellings such as hospitals and sports centres.

As the price of fuel has increased over the last few years, it now makes economic sense to bring CHP technology into the domestic setting.

A micro-CHP boiler is defined in the EU Act on Cogeneration as a domestic unit that is limited to 50kW of capacity.

The different types of CHP boiler

There are three types of micro-CHP boiler:

The Stirling engine CHP boiler

The Stirling engine CHP boiler is a type of external combustion engine, where the combustion engine is heated when the boiler is fired up to produce the hot water. This heats up the fully enclosed working gas within the Stirling engine, causing it to expand. The expansion of the working gas forces a piston to turn up and down between a copper coil, generating an electrical current, which can then be used in the home. The working gas usually used in a Stirling engine is helium, due to its strong heat transfer properties.

The main limitation of this type of boiler is that it only produces electricity when you have the central heating on, so despite being a very efficient type of boiler, it does not produce an abundance of electricity. A key advantage is that the combustion process involved in a Stirling Engine CHP boiler is much quieter and more efficient than internal combustion engines.

The internal engine CHP boiler

This type of CHP boiler is commonly used in large dwellings such as hospitals. It involves using a fuel source to drive a turbine, which is connected to the electricity generator. The waste heat from this combustion process is captured to produce hot water for the space heating and warm water. This is the most common form of CHP boiler found to date. However the process is noisy and you have far less control over the hot water generated, so fuel cell and the Stirling engine CHP boilers are often preferred.

Fuel cell CHP boiler

Fuel cell CHP boilers use fuel cells which convert fuel and air directly into power and heat through a quiet, efficient, solid-state electro-chemical reaction. A video demonstration of how a fuel cell CHP boiler operates in the home can be found on the Ceres Power website.

Fuel cells generate power significantly more efficiently than internal combustion and Stirling engine CHP boilers. This is because fuel cell CHPs convert chemical energy directly to an electrical current, maximising their efficiency.

This type of CHP boiler is still in development so is not yet commercially available on a wide scale.

How CHP boilers work in the house

A home would typically use a boiler to meet its heating and hot water needs only, and then source its electricity from the grid. Central generation wastes a significant proportion of the energy it creates, through heat losses in the power station and in the transmission and distribution network.

Micro-CHP boilers avoid these losses, and capture the heat for use within the home. This efficiency can save the consumer around 25% of total energy costs (around £600 off your bill if you have a typical 3-bed semi-detached house), and reduce each home’s CO₂ emissions by up to 1.5 tonnes per annum. Micro-CHP boilers are designed to generate all of the heating and hot water and a significant percentage of the electricity needed by a typical UK home.

The CHP boiler can use a variety of fuel options including the gas that is supplied by your current provider, but also hydrogen, LPG & biofuels. Even during the summer when the home’s central heating system is turned off, the heat produced by the micro-CHP boilers when generating electricity can be stored in a back-up hot water cylinder and then used for domestic hot water. Therefore the micro-CHP boilers are capable of operating all year round, maximising energy bill savings 365 days a year.

Micro-CHP boilers are designed to one day replace your normal condensed boiler, using the same types of connections; they also have similar installation and maintenance requirements. A micro-CHP boiler only requires one connection to the electricity network in the house and it’s ready to go!

Industry development

Micro-CHP boilers are an example of a microgeneration product for the home. The UK Government has estimated that microgeneration products (such as micro-CHP boilers) have the potential to supply over 30% of the country’s total electricity needs and help meet its international environmental obligations, such as the 2020 EU carbon emission reduction targets. Owning a micro-CHP boiler is one step in the right direction. Full costs in the UK of a micro-CHP boiler including installation are yet to be made fully transparent; however incremental cost estimated in the region of £2,500 to £3,500 versus a condensing boiler, therefore a full installation is then estimated at between £5,000 to £7,000.

Research commissioned by the Government has shown that micro-CHP boilers have the potential to become the micro-generation ‘system of choice’, replacing the condensing boiler, which is the standard system in most UK homes today. Commercial experience has also shown that realising the benefits early pays off the most over the long-term.

Currently only the Stirling engine-type micro-CHP boilers have been made available on the domestic market. For example the Baxi Ecogen product is one of the few available micro-CHP boilers that is commercially viable and available for the home. By the middle-end of this decade, the expectation is that fuel cell models such as the Baxi Gamma 1.0 will be fully available to the UK consumers.

When fuel cell micro-CHP technology is commercially available, the consumer should see the price of Stirling engine models fall. In addition with the competition in the fuel cell space (Baxi, Ceres Power, etc), this should also make those models commercially competitive. Current evidence suggests that the take-up in UK homes has only been limited, with a lower number of Micro-CHP boilers currently installed in the UK than expected by the government – as opposed to Denmark and Germany where the technology has been more widely adopted.

CHP Boiler Technology Summary

The following list is a quick summary of the CHP boiler features:

• Delivers central heating, hot water and electricity
• Simple to install, replacing an existing gas boiler
• Easy to use with automatic operation
• Can use the same gas supplied by British Gas, NPower and other gas providers
• Lifespan of the fuel cell boiler, yet to be determined (but typically 10-12 years)

Remember micro-CHP boilers are efficient because they generate heat and electricity in one place. They will save you money and help the environment. Currently only the sterling engine type of CHP boilers are available to the residential market (internal engine CHP boilers are available for large properties), but in a few years’ time fuel cell micro-CHPs will also be available. Micro-CHP boilers are a strategic domestic technology for micro-generation that will help homes with their energy needs, but also help the UK (and other EU countries) meet external carbon emission targets.

Benefits

• CHP boilers are more environmentally friendly, reducing a typical home’s CO2 (carbon dioxide) emissions by up to 1.5 tonnes per annum in the UK.
• Mounting a CHP boiler can help you reduce your energy costs by 25% or more.
• Most CHP boiler manufacturers have partner agreements with the major suppliers (e.g. with British Gas) who provide installation services. Potential customers should check first with the manufacturer if you would like to arrange their own private installation.

Limitations

• The payback on the premium, which is the additional cost of a CHP boiler versus a condensing boiler, can pay for itself over the product’s lifetime. Note: Research in this area is not extensive as there are currently only a few commercialised producers of domestic CHP boilers.

Cost

• The full cost of installing a CHP boiler is somewhere between £5,000 to £7,000, depending on the type of installation and home specification, which is quite a big investment for a typical household.

Solar PV panels – are they still worth it?

The benefits of solar energy are obvious – free sunlight can cut your electricity bills, you can be paid for the electricity you generate (even if you use it) and you can sell surplus electricity back to the grid. Most importantly perhaps is that it is green and no harmful greenhouse gases will be released into the atmosphere during energy production.

Yet do the recent government cuts in the feed-in tariff negate any of the above benefits? The feed-in tariff for solar PV panels will reduce again from 1st November, by 0.54 pence / kW. In this blog, we will look at the pros and cons of installing solar panels on your house and ask – is it still worth it?

Solar PV installation costs

The cost of installing a solar PV system has dropped significantly over the last year – in May this year a typical house requiring a 3kWh system would be set back £7,700. It is now possible, 5 months down the line, to get the same system for under £6,000.

Already this year we have seen the FIT rate reduced from 43.3p to 16p and from 1^St November it will reduce again to 15.44p. However, you are still paid 4.5p for each unit of electricity that you don’t use and export back to the national grid, up from 3.2p.

What kind of Return on Investment can I get on a Solar PV installation ?

With nearly all energy suppliers increasing their prices over the last few days, our attention returns to solar panels as another option to beat the energy price hikes. Solar still provides a return-on-investment of about 8%, which is higher than all the high-street banks, and your installation can be paid off in about twelve years. Not only is it a green option, it can be seen as as a serious investment and a way to avoid the inevitable further rises of energy bills.

What if I choose to sell my house?

We live in tough economic times and the housing market remains a buyers’ market. Estate agents are desperate for those extra features which will separate one house from the next. Solar panels are most certainly a plus point. House prices will probably follow those in the USA, where solar panels are currently more prevalent. Research by the US National Renewable Energy Lab has shown that houses powered by solar energy are likely to sell for 17% more than those powered by non-renewable fuel. What’s more, they are likely to sell 20% more quickly when put on the market.

Furthermore, any individual who buys a house that is already fitted with solar panels benefits from the increases that the installation brings to a homeowner, as the ownership of the panels and the Feed-In Tariff – where selling surplus electricity back to the national grid results in a profit – is transferred with the property. Also, if the homeowner makes any profits, they are tax free (around £900 a year for a typical 3kw system), which is a huge incentive to prospective buyers, especially as they will not be offsetting any initial installation costs. In an age where we must look to offset our carbon footprints; in an age where many activities such as travel contribute significantly to greenhouse gas emissions, individuals are looking for ways to make their way of living more environmentally clean.

So in conclusion, with installation costs going down, the value of your property increasing AND the high yields on investment, solar panels still reflect a very good investment for your home. If you have a south facing roof and are not planning to move in the immediate future, you would be mad not to! You can visit our solar section to find out more.

N.B

These figures have once again changed, please see the latest update here.

Update 8^th November 2012: Since this article was written Mr Obama has won a second term as President of the United States. You can see our thoughts on what impact this may have over the next 4 years at the bottom of the post.

The first all-nighter I ever pulled was to watch the 2000 Presidential Election between George W Bush and Al Gore (the latter becoming an outspoken individual on climate change). In the months leading up to the election, I became obsessed: I was following anything that would allow me to have a better understanding of which way the vote would fall. It all culminated on the first Tuesday of November, the box office event itself, the US Presidential Election.

This particular event was particular fascinating to me as it had a very British feel to it, reflecting our love of cricket – it all ended up a score draw after more than 5 days of play!!

Two further presidential elections have since passed, and we are on the eve of the 2012 Presidential election. Since I have been following it, I get the sense that energy security and the environmental agenda are resonating with more and more of the US electorate.

Since the early 2000’s, oil price have gone from an average $20 to over $100 per barrel, which has led to a 3-fold increase in price at the pumps. At the same time, domestic heating bills in the US have gone through the roof (in much the same way as the UK). The need for the USA to have a steady, uninterrupted supply of fuel and for home owners to be able to access this fuel at a reasonable price and use it more efficiently will resonate as being an important issue with potential voters.

The purpose of this blog (from the other side of the pond) is to examine more closely what each presidential candidate is saying about these policies. This blog isn’t a judgement of their past performance, but more a balanced appraisal what they have delivered so far, which should help us try and predict what they might do over the next 4 years should they get elected.

Some political analysts have said that the environment and energy policy is one of the areas that the candidates can clearly be distinguished in terms of their views, while others have also said there’s not a whisker between the two when it comes to these issues.

Let’s first turn to the incumbent candidate the president of the United States – Barack Obama, and examine the positive and regressive steps he has taken on sustainable energy and the environment.

Mr Obama’s view on the Environment & Clean Energy

You don’t have to go back that far to see how Mr Obama feels about the environment – in fact, you only need to look back at what was said about the subject at the recent Democratic Party National Convention. Mr Obama made clear in his speech that he will support investment in renewables (such as wind & solar PV), because he is concerned about the effects on the environment. In addition, he has also championed other solutions like the ‘greening’ of the US motor industry, which has now seen a record number of hybrid and electric models being rolled off the production line and on the US highways.

Mr Obama’s political record

Ever since Mr Obama has held political office in Capitol Hill as a Senator, he has frequently voted fro pro environmental measures. He has consistently supported trying to get the US to rely less on oil imports, whilst at the same time aimed to promote research and use for environmentally energy to balance the US energy supply. For example, in 2005 he backed the then McCain – Lieberman amendment, which would have established an earlier version of a cap-and-trade system. He had also spoken in favour for other carbon emission amendments and policies that supported use of cleaner techniques for industry and road travel.

As President, Mr Obama was widely credited by international press for trying to pass the American Clean Energy and Security Act of 2009 through Congress, which would have effectively have established a limits to the amounts of carbon dioxide emitted in the US. The bill would also have established carbon permits, which companies could have bought and sold to emit carbon. However, although this bill was passed by the House of Representatives and gave Mr Obama plus points for environmental policy credentials, the bill died soon after in the Senate, where it was met by staunch opposition.

He has to be praised for the way he handled the BP oil disaster off the Gulf of Mexico in 2010. While robustly publicly naming and shaming a British organisation was seen as a bit heavy handed in the UK, in hindsight, it was the correct approach and set a firm tone on how oil companies should operate and conduct themselves when it comes to oil drilling and exploration.

One can argue that Mr Obama was staying true to his election pledge of making the US less reliant on oil when earlier this year he signalled his opposition to the extension of the Keystone Pipeline. In the time he has been President, we have seen a record number of renewable energy projects kick off, such as: seeing a fourfold increase in solar PV farms started or being built; nearly doubling of total energy being produced by biomass and wind, an unprecedented amount of federal funds being directed into energy efficiency and carbon emission projects.

However, Mr Obama hasn’t gone far enough

Recent assessment of history through shows that Mr Obama’s administration has shown a much lower appetite to bring in policies and initiatives on the environment. The reason behind it that the economy and safeguarding American jobs has been the most important issue in the US since the economic downturn in 2007/08, and talking about the environment in this situation has been dismissed as being out of step and out of touch with the American voters.

Countering the ‘anti-oil drilling expansion’ points mentioned above, Mr Obama actually just before the Gulf of Mexico oil spill voted in favour of easing offshore drilling. Also, he was a major critic of the Keystone Pipeline, but has recently disappointed environmentalists by seemingly siding with a more measured building programme. In addition, since Mr Obama has been the President, oil output levels in the US have actually increased and have returned to their pre-2003 levels.

These points, looking from the outside, are contradictory to his rather pro environment stance as given prior to getting elected, and his more recent green rhetoric leading up to the 2012 Presidential campaign.

What do we think Mr Obama will do if he was re-elected?

We see more of the same policies on the environment and clean energy from Mr Obama in his second term as President. We don’t believe we will see a cap-and-trade system introduced any time soon in the US, with the recent Democratic convention highlighting that Mr Obama doesn’t necessarily carry the voices of the whole party when it comes to this issue.

A second term will probably lead with more measured initiatives, such as once again focusing of improving vehicle efficiency and ensuring more cars on the road pass that critical 35.5 miles to the gallon range. Under Mr Obama in his second term, we should also see more nuclear power expansion, with the Fukushima disaster not abating the appetite for this power source in the US any time soon.

We don’t see federal spending on subsidies for solar PV, wind and biofuels stopping any time soon, but with pressure to reduce the federal budget from next year, we may see major cuts for these industries, just as we saw here with the feed-in-tariffs in the UK in 2012.

As mentioned, with oil output in the US increasing under Mr Obama, measures to support shale gas fracking will be central to the long term energy solution, but so will energy capture measures, which Mr Obama wants to see implemented on power stations up and down the country to reduce the carbon emissions and increase the state of welfare for local communities.

Let’s turn to the Republican Party challenger – Mitt Romney– and examine the positive and regressive steps he has taken on sustainable energy and the environment.

Mr Romney’s view on the Environment & Clean Energy

The view of the Presidential candidate Mr Romney (since the Presidential candidate selection process started) is to make the US more self sufficient when it comes to energy use and decreasing the barrel of oil imports. While Mr Romney is also for developing clean energy, he is firmly against what he calls ‘crony capitalism’ to enable this – which is federal intervention and using central government tax dollars to subsidise green programmes. While he was in public office as the governor of Massachusetts, he has accepted that there are man-made forces at work which have caused the warming of the planet. But how does his previous political record stack up on these issues and what does the crystal ball say about what type of green policies he would push through if he were  elected as President?

Mr Romney’s political record on the environment

When Mr Romney was the Governor of Massachusetts, he pushed through policies that were pro environment and pro conservation. While he was in office he made many statements stating that he believed in climate change and was pro interventionist policies that would encourage renewable energies.

An example of his clean energy agenda, as Governor, he appointed a prominent environmental advisor, Douglas Foy, to oversee some of the programmes that were subsequently introduced. Throughout his time as Governor, his state saw the launch of over 70 initiatives including: trying to tax vehicle emissions, cleaning up factories and using tax and spend policies to promote the growth of clean energy generation. He supported ambitious targets such as aiming to generate 15% of the state’s energy from renewables and cutting 25% of Co2 emissions from state agencies by 2020.

In the 2000’s, Mr Romney had clearly been pro active in trying to be on the side of public health and using the state executive powers to put forward policies that are seemingly now more out of character with his current Presidential campaign. In addition, he also wanted to limit offshore drilling, and was at one stage an advocate of a regional cap-and-trade carbon emission mechanism.

What we think Mr Romney would do if he were elected as President

Time magazine’s recent article described Mr Romney’s attitude to energy policy as “drill baby, drill”, which was an assessment of a 21 page energy white paper he produced for this presidential campaign. The paper leads us to believe that a Romney administration would likely relax oil drilling restrictions, cut regulation and approve the completion of the Keystone pipeline which Mr Obama has opposed.

While Mr Romney is still for the development of energy technology and funding research in this area, he is not about to do so at the expense of fossil fuels. While he wants to have a ‘level playing field’ for energy generation, he contradicts himself, as he doesn’t support removing subsidies for already quite profitable oil companies. Our crystal ball says that Mr Romney is not about the halt drilling and shale gas fracking activities, which have recently led to the US once again being a net oil and gas exporter.

Most international pundits are slightly more pessimistic about the US committing itself to a second, more ambitious round of carbon emission targets under his stewardship. Then again, even Mr Obama’s current administration wasn’t too willing to accept a global way forward at last year’s Durban summit.

Concluding points

Looking at the year so far where we have had heat waves, droughts, wildfires and hurricanes, it’s hard not to think that all these extreme weather events have had nothing to do with climate change. Our assessment is that both candidates see the importance of climate change as an issue, with Mr Obama directly addressing this problem, but with Mr Romney acknowledging it as an issue but prioritising energy security through the expansion of fossil fossils.

Whoever becomes the next President of the United States will have an almighty challenge on their hands. The US economy has never hit the highs it saw in 2007 and to an extent; deficit spending has been a major component in keeping the economy there afloat. So whoever is in the White House will have to make some tough decisions about where federal dollars are spent. It is easy in those situations to slash energy policy development budgets and spend less on environmental conservation, but at what ultimate cost?

The UK model is by no means perfect, and in fact our current government should be doing a lot more, but it has maintained the feed in tariffs and invested a chunk of money towards research into renewables, because over the pond there is more of a consensus that if you invest in green fuels now, it will pay off in the long run with cheaper and more secure energy supply.

Update on Green policies debated at the 2nd Presidential Debate:

At the 2nd Presidential debate in New York on the 16th October, Mr Obama and Mr Romney clashed on energy policy. Mr Obama argued for more green energy solutions such as biofuel, wind power and solar PV as well as extending programmes to encourage energy efficiency in generation and transportation. Mr Romney on the other hand argued for more oil drilling and an expansion in coal production, with a view to make North America energy self sufficient. Mr Obama in our view had slightly more convincing arguments in this debate to answer to some of the current problems in energy security and the challenges on the environment.

Update: 8^th November 2012, Mr Obama wins a 2nd Term

Mr Obama having won the election, in his victory speech said that he doesn’t want future generations to be blighted by ‘destructive’ effects of global warming. His call to action on the environment in this speech could be taken as signal that during his 2^nd term, there will be renewed focus on giving climate change and renewable energy the appropriate focus they deserve!

At a domestic level to signal a renewed focus on the environment and clean energy, we expect continued support (underpinned by tax breaks) for renewable technologies such as wind and biofuels from the President. In addition, we expect Mr Obama to be less willing to support additional subsidies on fossil fuels and cool the expansion of drilling and fracking activities. However this may be tough given that these industries support quite a number of jobs.

However we appreciate that many bold initiatives such as taxing carbon and even resurrecting the 2009 Cap & Trade bill will be very challenging give a divided Congress. On a high note, we hope the next 4 years means more ‘green’ jobs, more clean energy and smarter ways on how energy is consumed in the US.

The Headline Cuts To The Feed-in Tariff

On the 1^st August 2012, the solar PV Feed-in Tariff saw another round of cuts, with the subsidy dropping from 21p to 16p per kilowatt-hour. This latest fall in the subsidy comes hot on the heels of the previous cut in April this year, where the feed-in-tariff was reduced from 43.3p down to 21p.

Besides the cut to the subsidy, the other major announcement was that the feed-in-tariff payments will now only be guaranteed for 20 years as opposed to the 25 years offered previously, therefore reducing potential future returns.

The Detail

The exact details of all the tariffs are summarised below.

Solar Photovoltaic with less than 4kWp with an EPC band D or higher will drop to 16p/kWh, while band E or lower will drop to 7.1p/kWh.

Export tariff rates will increase to 4.5p/kWh across the board for all new installations erected on or beyond the 1st August 2012.

The Reasons Why & What It Means For You

The feed-in tariff was designed to drive uptake of solar PV systems by homeowners, which it certainly achieved, with over 80,000 homeowners opting to take advantage of the scheme.

Unlike the Renewable Heat Incentive, which is to be funded by HM Treasury, the money set aside for for feed-in-tariffs is paid for by consumers through additional charges in their electricity bills. The idea is if more people start installing solar PV, then more are eligible for feed-in-tariff payments and this adds more cost to the consumer, which may be seen as unfair. So in the interest of fairness in these tough economic times, the government has probably tried to make a balanced decision by cutting the current tariff on offer. On the one hand still committed to feed-in tariffs by keeping them, whilst at the same time trying to protect the ordinary consumer (by lowering the tariff) who perhaps haven’t taken advantage of this scheme as of yet.

The news is not all bad though, despite the feed-in-tariff being cut by over 20%, if you were to go and buy a 4kW solar PV system today, the price you can expect to pay is around £7,000 – £9,000, whereas the same system only 12 months ago could well have cost you in excess of £13,000.

The increased competition in the Solar industry, largely driven by the massive production facilities being built in China and improvements in technology has caused these price drops, and they are expected to continue to fall as time goes on.

The other good thing to come out of the latest feed-in tariff is that the export tariff has been increased to 4.5p / kWh across the board, to better reflect the value of a kWh of electricity bought from the homeowners.

So fear not, the feed-in-tariff has taken a bit of a hit, but installing a system in your home still has a 8-10 year payback period, and perhaps more importantly, it will offer some protection against the utility price rises that appear to have become a permanent fixture in our daily lives.

What is the Solar Power Tipping Point?

The solar power tipping-point is coming. In fact, in some countries with particularly high energy costs and lots of sun (like Hawaii), it has already been reached. The tipping point, also known as grid parity or the golden goal, is the moment when solar produces power at the same price as electricity from the grid. At this point, energy produced from solar sources will match other more traditional sources such as coal, or even gas.

At the moment, the reason for putting solar PV (photovoltaic) panels on your roof in the UK is an economic one. It is the direct result of the feed-in tariff (and to a lesser extent the export tariff), which is the government policy which pays you per kWh of electricity you produce. This helps to create an artificial economy for solar PV, by increasing demand and driving uptake.

How is Solar Power going to reach the tipping point?

To hit true parity though, solar PV needs to become competitive without this helping hand. So how is this happening?

The major reason is the massive price drop in the silicon PV modules. In 2011 the price of these modules halved, as the result of two things. Firstly, huge new solar production facilities opened across the world, particularly in China, increasing competition and actually driving smaller facilities in Europe out of business. Germany once had a world beating solar energy industry, accounting for a 20% market share in the global solar market. It now accounts for just six per cent. Secondly, technology is improving and there are increased economies of scale, which has resulted in modules coming down in price by 18% for every doubling of capacity.

Existing energy prices can also only go one way – up. With ageing infrastructure and a lack of capacity in the UK, investment and modernisation will have to be made. This will be subsidised through higher energy bills. As the supply of fossil fuels decreases or fuels become harder to source, producers will have to drill deeper or use more expensive methods.

So these mechanisms are driving us towards the tipping point, but there are also barriers to us getting there. Firstly, solar PV is still costly in the short term – £7,000 or more for a system with a decent payback. Compare this to electricity from the socket at 12p/kwh.  In the current economic climate people are unable or unwilling to pay for the installation. Obviously the higher the uptake, the higher the supply and the quicker economies of scale are introduced into the production process.

Solar PV is also intermittent: electricity is only produced when the sun is shining. There are solar PV plants in the USA that are planned to have integrated molten salt technology, which essentially will allow power stations to produce electricity 24/7, but this just isn’t viable for the domestic user. Therefore solar can’t be the only solution. It is not suitable to provide the base load in the energy mix. I think nuclear energy (either existing fission plants, or Thorium molten salt) would be best to provide the base load, which would subsequently be topped up by solar PV technologies.

Also if solar PV installations are to become commonplace in the UK, we need to make changes to the grid. In comparison to traditional power plants, solar PV installations take up much more space (per square metre). Therefore what is needed is a shift from a centralised utility grid to a decentralised grid, which will again require more investment.

Finally it is worth briefly examining the feed-in tariffs (FiT) and other subsidies; late last year the FiT for UK solar was £0.433 for every kWh of energy produced. This was cut to £0.21 in May 2012, and is due to be cut to £0.16 at the beginning of August. The FiT is supposed to support the uptake of solar energy in the UK, but the government’s decision to make such a large cut in the FiT in May had a very negative impact on the UK solar industry. Obviously the FiT should be decreased in line with falling solar module prices, but this decrease and the cuts should have been far more gradual.

In conclusion, solar will hit the tipping point and reach grid parity. It may not happen in the UK over the next couple of years, but the signs are there that it will happen by 2020. At this point, the decision to invest in either traditional fossil fuel or solar PV will hopefully become more obvious for the government.