Solar power is flavour of the month around town. With the proposed community owned power station and the Rooks thinking about getting panels, it sounds as if Lewes is leading the way into a low emissions future. In the face of environmental catastrophe, free energy from the sky certainly sounds like a tempting option. Lately I’ve been wondering though if the optimism around solar power is justified. What, one is tempted to ask, could be the trouble with energy from the sun?
Looking more closely at solar, the primary trouble is something familiar to Brits: the weather. Blighty is not a sunny climate and we use the brunt of our electricity in winter when the supply of sunshine is at its least abundant. There is also cost of installing panels. Photovoltaic panels (that’s the kind which generate electricity) for a typical house are likely be somewhere between 7 and 15 grand. When you stick these factors together the figures don’t look encouraging, either from an individual point of view or from the wider social angle.
For individuals even the most promising scenarios suggest that if you install such panels, you might get electricity worth about 25% of the installation costs over the life of your system. While money isn’t everything, this picture would leave solar unlikely to catch on except among people who have spare cash and enjoy the warmth generated by their own piety rather than the small amount of energy they’ll get in the British winter. The last government recognised this and set up an incentive called the feed-in-tariff to encourage take-up. This involves buying any unused electricity householders generate from solar panels they’ve hooked into the National Grid (presumably mostly in the summer). The rates of payment for spare lecky are generous to put it mildly: often several times the cost of electricity generated by other sources. The question is open as to how many people this will encourage but it’s undoubtedly a nice investment opportunity for those who can afford it. The social perspective comes in when you realise that the people paying this enormous subsidy are the rest of us. Clearly this isn’t sustainable and a rather hot debate among environmental commentators right now is about whether this money would be better spent on the development of other alternatives to fossil fuels. The feed-in-tariff represents a big bet (with our money) that the price of the technology will ultimately come down and that of other energy sources will rise, to the point where solar is cost-effective.
Solar isn’t a significant energy source at the moment and there are plenty (including many earlier advocates) who doubt it ever will be, for the UK at least. You might want to consider this if you were thinking of taking a shareholding in the local power station. Is it a good bet? Or is it as big a leap of faith over sense as the Lewes Pound? For now it is worth remembering that, for something free, solar sure is expensive.
Blighty is not a sunny climate and we use the brunt of our electricity in winter when the supply of sunshine is at its least abundant.
ReplyDeleteThis is irrelevant whilst demand in the summer is greater than the installed solar capacity - which it is always likely to be. No one is suggesting PV will every supply the majority of the UK's electricity!
When you stick these factors together the figures don’t look encouraging, either from an individual point of view or from the wider social angle
PV with FiT certainly makes sense from an individual point of view, what other investment offers similar rates of return?
The social perspective comes in when you realise that the people paying this enormous subsidy are the rest of us.
Since the country has an energy deficit (we import more oil/coal/gas/elec than we produce/export) and since the prices of those imports are increasing, not investing social funds in expanding indigenous production has a large social cost. The only question about PV is one of opportunity cost, could the same money generate more indigenous energy if invested elsewhere. Clearly the answer is yes today, but that discounts where we are in the R&D life cycle of all different indigenous energy sources. Solar PV technology is improving, costs are falling and the FiT is accelerating this process. It's a small price to pay for speeding the development of what will undoubtedly be a vital energy source in the second half of this century.
Thanks for your comment Chris.
ReplyDeleteA couple of points I'd make. I think the climate of the UK is important as it is relevant to my overall point which is something you also kind of pick upon: namely the challenge for solar in the energy market. Basically its easier in hotter climes because you get more energy for your initial outlay.
I'm not in opposed to solar but there has been a big splash in Lewes lately with a solar power station initiative and there has not been any quetioning comment so I thought I'd try and address that.
When I said that PV didn't look encouraging from an individual point of view I did mean without the subsidy and I specifically linked the subsidy to making this more worthwhile.
Solar getting established seems to me to rely on 3 variables (either individually or a combination therof).
- The cost of the technology coming down (Looking very likely)
- The cost of other energy sources going up. (Maybe but not nearly as much as some of more apocalyptic fellow Lewisians suggest. The real problem it seems to me is not that fossil fuels are running out but that they are still plentiful e.g. coal and shale gas. This puts solar and other renewables up against it).
-Blighty getting hotter (I wouldn't rule it out but).
The other main question of the moment is really whether FITs are a good use of funds in this case. I'm not so sure. The German experience wasn't great and they discontinued them. The costs of the technology are lightly to come down because of the demands of other (far larger) markets. One thing I'm sure of is that they are quite a good way of shifting money from poorer people to better off ones and this regressiveness troubles me too. I think I'd feel more comfortable if some of that money was going into other forms of R&D or (more simply) into initiatives to help those on lower incomes alter their houses to use less electricity.