Solar Power – where now?

If you interested in the subject, you will no doubt have heard that the government is cutting the feed-in tariff by half, with almost immediate effect (given the delay from order to installation). So what now?

First of all, a little background to the market. Cheap panels (mainly from China) have been appearing in volume in the UK, driving panel prices down. This is the good bit, as it is resulting from competition. At the same time the FiT has been cut in Germany and Spain, leading to an oversupply. This has also reduced costs further, not necessarily in a good way for the solar industry. The UK government chose to increase its FiT (in line with inflation) in April, when with hindsight it should probably have reduced it, by a small amount. So all in all we ended up with the position in the UK being that solar power became a good money earner (irrespective of the merits of the technology) and while this has driven growth, it has been too quickly. The necessary (albeit sudden and substantial) correction will have a negative impact on the solar industry, with potentially grave consequences – for the industry, I’m not drawing conclusions beyond that.

The figures I gave in my previous post regarding a typical system cost, while accurate for when we got our panels are several thousand pounds in excess of today’s prices. This means that for a large (3 to 4kWp system) in a good location (no shading), the cheaper panels are still cost effective, although the returns now take approaching 20 years for you to be better off. This means a more substantial risk on the owner, should components need repair/replacement. It also means that borrowing money to fund such an installation is unlikely to be financially viable.

All in all, I’m a little disappointed as solar power will return to being a small niche market. Maybe that’s all it should be in our high latitude. Oh well, I just hope somebody gets on with building nuclear power stations, which we need if we’re going to “keep the lights on” and meet our low carbon targets… but that rant could wait for another day, and I hope it might be somewhat less controversial.