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The Low Carbon Economy Ltd

14 Feb 2011 04:02:40

Re: Premature UK Feed-In Tariff Review

Dear Ministers,

Further to DECC's recent announcement relating to the review of the Feed-in Tariff (FIT), I implore you to you to consider the possibility that changing legislation to penalise mid-scale (up to 5MWp) roof- or ground-mounted photovoltaic (PV) installations (the lowest cost subsidy PV), in favour of smaller-scale more expensive PV technologies, is not a logical policy, or in line with the clear objectives in the Spending Review, as below:

Contrary to the recent announcements focussing on "homeowners and small businesses", the primary aim of FITs is (and has always been), to help the UK meet its 2020 emission reduction commitments by increasing the amount of renewable energy in the energy mix.

Furthermore, mid-scale PV installations offer significant additional benefits critical to aiding the transition to a more decentralised low carbon economy which, when clearly understood, must therefore be supported. We summarise the benefits to the UK of commercial-scale PV below; please read them carefully.

• The FIT subsidy is 41.3p/kWh for domestic installations vs. 29.3p/kWh for larger installations – therefore for every unit of energy produced, domestic PV costs almost 30% more than commercial-scale PV. As the FIT budget is capped, incentivising smaller more expensive PV would result in up to 30% less PV installed than if the focus was commercial scale PV. We don't recommend changing any PV tariffs, large or small, but if the purpose really is to improve efficiency of the FIT, penalising the most efficient subsidies which deliver more renewable solar energy per pound spent, will not help us to meet our 2020 targets!

• A focus on only small-scale installations will prevent the reduction in prices delivered by economies of scale offered by deploying larger systems, ensuring that prices stay higher for longer (forcing subsidies to remain for longer).

• International inward-investment will be significantly reduced if the UK is no longer perceived as an interesting (and safe) market for PV/renewable energy investment. As a result of the recent government announcements this has already happened. Virtually all proposed projects are now on hold. The damage will be permanent if the FIT is changed before the pre-agreed schedules and the maximum size PV plant eligible for the FIT becomes only 50kW.

• Countless UK green jobs will be lost if mid-scale PV is significantly penalised. As an example, over 17,000 UK jobs were previously forecast to be created in 2011 alone.

• World-leading international solar PV companies (such as the very successful German PV companies currently setting up joint venture companies in the UK) will fail to develop in the UK without the market conditions offered by mid-scale PV opportunities. This will also prevent any meaningful solar PV UK export businesses developing.

• North Sea oil and gas is declining sharply, and globally fossil fuels are becoming increasingly expensive. Over the useful life of a PV power plant (can be up to 50 years), PV is a low cost option, and is insurance (economic and energy security) against rising fossil fuel prices.

• Solar PV provides reliable low carbon decentralised power to local areas and communities. Even in low-light conditions, improvements in technology mean it can still be 100% relied upon (vs. other more intermittent renewable energy sources such as wind power which is not reliable on a daily basis). – and Germany has similar sunlight levels to the UK.

• Mid-scale PV power stations provide clean, renewable, carbon-free power for up to 50 years, in daylight hours when power demand on the grid (in particular from UK industry) is maximised. This also prevents the need for additional spinning reserve capacity.

• The UK is currently forecasting brownouts by 2016 (only 5 years away). Solar PV is one of the fastest-to-deploy renewable energy technologies which in conjunction with energy efficiency has the potential to significantly contribute to our energy security challenges. .

• Mid-scale PV does not require costly, and lengthy enhancements to the grid-infrastructure in order to be deployed, hence lower costs and much faster implementation. Having said this, not a single 5MWp solar power plant has yet been built in the UK, and each one takes at least a year to develop, gain planning permission, construct and connect to the grid. In order to make a tangible contribution we need to maintain and increase our momentum at this time to meet our commitments and help address our energy security challenges.

• The FIT is the only mechanism driving the adoption of mid-scale PV in the UK. If this is changed, there is no other policy that will continue the development of mid-scale PV. This is completely at odds with global policy such as the recently introduced US DOE Sunshot initiative , designed to drive down prices to grid parity and rebuild the US as the dominant global force in the PV industry. We also have the opportunity to make this happen in the UK, but not if the FIT policy for mid-scale PV is changed.

• The UK needs green growth – in the UK solar sector growth is (was) abundant – the policies work so please don't change them and destroy the seed of what is currently destined to become the next big UK success story!

We thank you for taking the time to read this information, and hope that this has been useful in demonstrating the clear evidence that the current move towards changing FIT policy to prevent commercial-scale PV from developing in the UK, is far from being in the best interests of the UK.

We are convinced that this change in thinking has been brought about by the work of well organised lobbyists with heavily vested ulterior interests, and would welcome the opportunity to discuss these issues together in person.

Toddington Harper, managing director, The Low Carbon Economy.

Discussion Thread  

15 Feb 2011

May I suggest a bit more examination of the un-subsidised benefits of equipment that can be written off against tax liabilities under current UK tax regulations and also produces an income which rises with inflation, at present 4% p.a !

I am working with a UK consortium to install Solar PV above supermarket car parks, given that they can benefit as noted above, and are considerable electricity users in summer for air conditioning and refrigeration. This to me would seem to a better application than "Solar fields" which just feed the grid at considerable expense to the taxpayer - if FIT is applied.

There are some 1.8 million+ car park spaces in UK, at about 2 kWp each.= considerable potential

As regards installations for non profit concerns, eg domestic & hospitals, someone should be able to devise some financial packages which take advantage of the depreciation, and inflation benefits noted above ?

21 Feb 2011

There is however a problem with PV as a solution to the energy needs of the UK: the problem is that our largest demand is between 5 and 7pm in winter. PV provides energy in summer when the demand is only from air conditioning - less than in winter. Also we are rather far north, which would mean that we get less out of PV than say wind, wave or tidal. The cost of PV per tonne of carbon dioxide saved is around £700 cf insulation for all at £6-£12 per tCO2. This is of course one measure of how to look on solar PV. This is not the whole picture but if saving CO2 is the reason behind it, and not energy security, then PV is a bad deal. As for energy security the Germans 10 year scheme only makes 0.4% of the total they consume. That's not much for an investment of £1.2 billion! Not many people are going to agree that they should subsidise this kind of industry. However, it is clear that nuclear is a lot more expensive than PV so should not really be a option - decommissioning costs are most important factor with nuclear power. Nuclear power costs about £1.6 billion per year over 10 years. So what is the solution to the energy crisis? Depopulation is the only solution. All others will fail unless this is carried out. Check out Al Bartlett if you don't agree.

Discussion Thread  


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