Walking on Sunshine

For great returns on solar generated electricity the time to buy is now!

As the dark, dreary days of winter close in what better time to be thinking about....solar generated electricity? The government has just announced the provisional rates for the new Feed in Tariffs (FIT) which means solar generated electricity in the UK has finally come of age. This is old hat in many European countries where the solar market is booming; and carbon emissions are falling as a result. The UK government, loyal to the end to our old friends fossil fuels even as it has become apparent that their time has come and gone, and even stranger proposing a failed, discredited technology – nuclear energy- to replace it has finally agreed it’s time to give clean, and renewable energy a chance.

Sweet spot

The government has just made it more attractive to generate electricity from solar PV (photo voltaic) by proposing the introduction of a feed-in-tariff (FIT) by April 2010. As a result of this it is anticipated that this will mean a removal of the current government grants available.

The expected FIT for solar PV from April 2010 is expected to be of the order of 36.5 pence per unit generated (this could still change) plus 5 pence per unit exported to the grid. This makes the financial case for solar PV (including grant funding) economically very attractive! Where else can you get in the order of an 8% - 10% return on your money? And if you sign up to Good Energy www.goodenergy.co.uk which is 100% renewably generated, they give you a whopping price of 15p per kW generated, and you can  also can access low interest loans using the innovative loan service Zopa, www.zopa.com. Zopa bypasses those dodgy banks and links lenders directly with borrowers.  

There is a ‘sweet-spot’ now to take advantage of existing government and community grants to reduce the capital cost, combined with future provision of a FIT to provide financially viable  solar PV – a viable low / zero carbon energy opportunity. It should be noted that there is still risk that the government will not give the FIT to households who have received an LCBP grant.  To discuss this in more detail please contact us.

The deal

Each household should receive a government grant of £2,500.

Using basic assumptions, the current simple return for a 2kW (Kilo Watt)  system is 2.2% (accounting for current government grants and energy / ROC assumptions as shown in Table 1 below), but the projected returns after FITs become available is around 8% or more.

Table 1: Solar PV returns per household pre-community grant

The economics can be shown to improve if households borrow money to install the PV system.  

Energy & Carbon Savings

Each 2 kW system will generate approximately 1680 kWh (kilo watt hours ) of electricity per annum using national data (source: http://www.energy.soton.ac.uk/solar/residential.html) It should be noted that local experience of south facing PVs in the south west of England is that they could generate up to 1800 kWh per annum (source: Beco Solar.), and several local owners of PV systems I have talked to have already this year generated over 1100 kWhs per KW installed!  

This translates to the following savings as shown in table 2 below.

Table 2: Annual energy & carbon savings

 I am going ahead with a 4 kW system for my house, and if others will join we can negotiate a bulk purchase from one of our local installers and make the return even more attractive.

What could be better?

• Fantastic return on your money 8% or more
• Significantly reduce your carbon footprint
• Increase your own and Totnes’s energy security and resilience- beats keeping your money in some dodgy bank hands down!
• Get the pleasure of knowing that much of your electricity is being made right over your head, clean and free. 

For more info get in touch with me, Naresh

georgegiangrande@yahoo.co.uk or 01803 732305

or if you have any questions about the facts and figures presented talk to Fraser Durham:

fraser.durham@carbonsense.com