Green feed-in tariff needs to maximise solar power

Thursday, May 14, 2009

MPs and others are now starting to recognise the potential of solar power technology in the UK, but we are still only scratching the surface

April 2010 could be a major milestone in the UK's attempts to deliver a low-carbon economy. Assuming all goes well, that is the date when the government will introduce new "feed-in tariffs", where a price premium is paid to homeowners, schools and businesses for every unit of electricity they generate from small-scale renewable technologies, such as solar photovoltaics (PV), wind and micro hydro power.

All of these technologies have immense potential in the UK. However, there is still a very real danger the government will lose its bottle and go for a tariff that will at best make a very marginal difference to uptake. If that happens, it will be a massive lost opportunity at a time when the government needs all the help it can get in meeting its 2020 renewable energy targets.

For solar PV, the government has already come a long way from its dismissive treatment of the technology in the 2008 Renewable Energy Strategy consultation, and with good reason. Under the level playing field of the government's own grants programme, for example, solar PV has been the technology of customer choice, accounting for 70% of completed projects to date.

But currently, we are only scratching the surface of the potential of this technology in the UK. The absolute resource potential of solar PV is 460 terrawatt hours each year, more than current total demand for electricity in the UK. That message is beginning to get through to MPs and others, helped by the launch of the "We Support Solar" campaign, which is backed by the Federation of Master Builders, Friends of the Earth, RSPB, and more than 220 MPs.

MPs and others now recognise one of the prizes of a well-structured and properly implemented feed-in tariff will be green jobs, and lots of them. Our own modelling, which reflects assumptions made by the government's own independent consultants, shows that by 2020 the tariff could create more than 100,000 solar PV services and installation jobs.

So how are we going to ensure that the feed-in tariff really does maximise the jobs potential in solar PV, but also in the other small-scale renewable electricity technologies? Here's how we think the UK feed-in-tariff should operate.

The government must keep it simple. The tariff should be structured to pay for generation not export to the national grid, to encourage the broadest range of take-up in small-scale renewable energy, from homeowners to investors. They must ensure it's easy for people with small green energy systems to connect to the grid.

Secondly, the tariff needs to encourage investment. That means setting the price for each unit of green electricity generated high enough to allow suitable returns for investors. We also need support for low- or zero-interest loans, to help people get beyond the up-front cost of many small-scale renewable technologies.

Lastly, the UK's feed-in tariff must create green jobs. The tariff should be structured to encourage microgeneration on buildings. For example, solar PV on buildings is more job-intensive than mounting PV on the ground and involves a broad range of skills from the construction industry (roofers, surveyors and consultants). In hand with this job creation, government should subsidise the re-training of electricians, roofers, engineers and others whose jobs are now lost or under threat from the construction industry's decline.

This story was featured on the Gaurdian Website.

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