British Photovoltaic Association
UK Solar PV Industry Manifesto
1. Solar power is creating an energy revolution. Falling costs mean that solar will compete with all other energy sources even without subsidy by 2020. This manifesto charts the successes of this young industry, and sets out the measures that Britain’s solar industry needs to maintain its extraordinary growth, and provide the nation with cheap, reliable and home-grown energy.
2. In sunny parts of the world, solar panels are already a cheaper source of electricity for consumers than buying from the grid. There are even utility-scale solar plants that compete with some of the cheapest electricity in the world – generated from shale gas in the United States.
3.This is extraordinary because solar has become competitive even without the full allowance for the costs of pollution created by its fossil fuel competitors. On the polluter pays principle, gas, coal and oil generation should be paying a substantial carbon price which would make solar even more attractive. Solar is becoming cheaper for consumers and businesses. And better for the environment and the planet.
4.The trend of falling prices and steady improvement in the yield of solar panels now looks inexorable. As the chart shows, the cost of electricity from solar has crashed from more than $1200 per megawatt hour in the early nineties to less than $100 per megawatt hour today (and even less in sunny, high-yielding regions).
5. Given the research and development that is underway, and the prospective technological progress, solar costs are likely to continue downwards on their impressive trajectory. This is the map of a world-beating technology: no other product with the potential to reshape the world economy so fundamentally has exhibited these trends since the fall in the cost of computer memory. That created the IT revolution. Now we have the solar revolution.
6. If Britain is to benefit from cheap, secure solar energy, it is crucial that the Government should see through its support for the industry’s early success. We project that, even in grey and cloudy Britain, solar power will be competitive with fossil fuel electricity by 2020. So we are explicitly looking forward and welcoming the day when subsidies for new installations can be phased out. Moreover, that point is close. By the end of the next parliament, if it runs its allotted five years, the support for this infant industry will no longer be necessary.
7. Solar is already making strides in Britain. In 2014, we passed the half millionth Feed-in Tariff installation, representing nearly 2.5 gigawatts of electric capacity. (The typical winter peak need for UK power is 50 gigawatts). That is ten thousand domestic installations each and every month, creating jobs up and down Britain. But there is much more that could be done, particularly in catching up with German and French levels of solar installation on commercial roofs. At present, nearly a third of British PV is on commercial roofs, just half the proportion in our big continental partners.
8. But that prize depends on sensitive policy. To ensure that Britain is not left behind in this race to home-grown and low-cost electricity, the Government must tailor its reduced subsidies to the fall in costs – not going too far or too fast, but not overpaying either. Our aim is to phase out the Feed-in Tariff for new installations from 2020 but to ensure that, by then, the industry is thriving and able to stand on its own feet. The industry needs to build its capacity so that the roof-top opportunities of solar power in Britain can be properly grasped.
9. The prize is enormous: EDF estimate that the maximum potential of solar power in the UK is about 140 billion kilowatthours a year, or 37 per cent of all our electricity use. If the industry gradually builds up to that sort of potential, it will make a major contribution to the UK’s energy security: nothing can stop sunlight and solar power. By saving imports of costly fossil fuels, solar power also protects the balance of payments. And solar will insure consumers against shocks to their bills: once solar panels are installed, there are no unpleasant surprises or sudden added costs. And solar power will provide a cheap way of reducing our carbon emissions and meeting our goal of making the planet safer for our children and grandchildren. No other technology meets the three objectives of the so-called “energy trilemma” so well: solar gives us affordable, secure and unpolluting energy.
10. Sceptics about renewables ignore the sharply falling costs of solar power, and point to the intermittent nature of solar output. True, at present all intermittent renewables need back-up for the times when the wind does not blow and the sun does not shine. This is factored into the Government’s capacity market costs, and DECC has estimated the balancing costs of the grid at no more than £10 per megawatt hour. Solar replaces fossil fuel electricity which has high and variable fuel costs and which pollutes the atmosphere.
11. Moreover, the development of storage solutions is progressing rapidly. It is already possible to generate electricity from solar power, and store it for a future period of peak demand. Dinorwic in Wales does this through pumped storage: using low cost electricity to pump water up to a high reservoir, which is then released to generate more electricity at peak times. But there are also big developments in battery technology which hold out the prospect of an economical solar-plus-storage solution for both industry and the home. And there are big investments underway – such as the doubling of lithium-ion global battery capacity by Panasonic and Tesla – which will bring scale economies and tumbling costs.
12. The ultimate vision is one of decentralized energy where the home-owner can generate much of their own power needs, storing it in the attic or in their electric vehicle. Solar panels already last 25 years, and have 25 year electrical performance guarantees. It is low maintenance and easy to install. This is now a mainstream fit-and-forget product with a strong track record of performance and reliability.
13. All renewable energy sources benefit from substantial public support in the opinion polling which has regularly been conducted for the Department of Energy and Climate Change, and the support for solar has been particularly consistent and strong. Not only do panels blend into roofs capes, but there are now specialist PV tiles that are so hard to notice that they can be used even in the most sensitive heritage environments.
14. In order that the industry should continue to expand and grow, the BPVA is pressing the political parties to make some key commitments ahead of the May general election. We are seeking investor certainty that can ensure a continued build-up of solar arrays at ever cheaper cost, supporting a domestic industry that has enormous potential, and which can create greater competitiveness for the UK economy and more local jobs. Here is the BPVA’s eight-point plan for sustainable solar power in Britain:
15. No surprises. The Feed-in Tariff should be reduced on the basis of clear evidence of falling costs of solar panels and installations, targeting a constant real rate of return on investment. We are seeking a no surprises policy that will take us steadily and predictably to the goal of subsidy-free new installations in 2020.
16. Quicker planning. Planning restrictions still hold up installations, and we are asking the new government to press on with permitted development rights for all unlisted commercial and residential rooftops so that home-owners and businesses know that they can install solar panels on south-facing roves with minimal paperwork and cost.
17. Better grid connection. One of the obstacles to more rapid roll-out of solar power is the difficulty of ensuring that the grid can take any excess generated by the panels. We want quicker information from Distribution Network Operators (DNOs) about grid connections for roof-mounted photovoltaic panels, and a rapid reaction response from the DNOs and the National Grid to ease up bottlenecks.
18. Correct valuation. Solar panels bring an income stream to any property on which they are installed, but one obstacle continues to be an unwillingness on the part of some investors and property professionals to recognize the benefits of the technology in the value of the property. At present, the business rate position for a pv system can depend on ithe legal structure (roof lease etc). It would be simpler and clearer to exempt PV installations from business rates, helping to provide comfort to property investors.
19. Install and move. Owners should be able to transfer their PV system to another roof-top without losing their entitlement to FITs. This is unlikely to happen often if at all, but the possibility that a tenant or a purchaser will not pay full value can prevent financing for projects. If owners are able to move their installations, more installations will happen. And more tenants and purchasers will recognize their value.
20. Allow public bodies to keep the benefits. The public sector has an enormous built estate, and the success of the schools programme (installing PV panels on school roves) has demonstrated a brilliant model for public expenditure savings. The entire capital cost of the installation is met by private sector companies, but a large part of the savings go to the schools budget. The Government should allow accounting units – whether schools, hospitals or even MOD installations – to keep the revenue and budget savings from solar installations.
21. Support for storage. If the vision of self-reliant communities able to generate and store their own power needs is to become a reality, we need more research and development into cheap storage solutions. We are asking the government to back R and D projects at British universities and labs so that our industry is at the cutting edge of the solar revolution.
22. Ministerial Forum. Meeting Britain’s full potential for solar power depends on tackling not just current obstacles, but on keeping those obstacles under constant review. In our experience, ministerial involvement has been essential in clearing Whitehall hurdles for solar installations, particularly when more than one Whitehall department is responsible for what needs to be done. We would like a regular forum set up to bring together key parties with the senior officials and ministers involved.