Investing in Solar PV
UK Solar Industry
The UK solar industry is set to boom in the coming years with exciting opportunities for investors and real possibilities for the government to reach its climate change targets through the reduction of carbon emissions.
Although not being as strong currently as the same sector in areas such as Spain, Germany and California, the UK photovoltaic (PV) market will attempt to catch up with foreign solar markets in the coming months through the introduction of important legislation and a drastic root change in public education regarding renewable energies. With this growing public awareness of green issues and important legislative changes coming in to play regarding the adoption of renewable energy, things are looking extremely bright for the prospects of the UK solar industry.
Renewable energy, in particular solar, is going through dramatic changes at the moment, primarily in the shape of the recently announced Clean Energy Cash Back Scheme. The UK government, through the Department of Energy and Climate Change, has asserted that a tariff or ‘clean energy cash back’ system has been introduced whereby small scale producers of clean, solar energy will receive guaranteed premium rates for the energy they supply back in to the national grid.
Currently, the feasibility of a British solar industry is being championed by a number of key players within the photovoltaic sector and groups such as "We Support Solar" have provided an important forum for those committed to the principles of creating a healthy solar energy industry throughout the UK. A number of large solar companies are currently in operation throughout the UK and are involved in the varied activities of manufacturing, installation and integration of a series of different photovoltaic products.
Solar installation in the UK is dominated by grid connected photovoltaic systems both on commercial buildings and newly built housing. The grid connection of course allows the ‘feed-in’ of excess solar energy generation back in to the grid in order to receive the ‘green energy cash back’ announced by the government. Perhaps the highest profile photovoltaic building in the UK is the CIS Tower in Manchester which has the largest PV façade in Europe and with it’s mosaic of solar tiles, saves up to 100 tonnes of CO2 emissions each year.
The UK has a healthy, outward looking photovoltaic industry which is looking to compete with the strong sectors which exist in countries such as India, China, Germany and the United States. The UK industry is seeking to compete through innovative design and manufacture of next generation solar cells, something which will be assured through organizations such as The Carbon Trust. Other PV research programs have also been established which are endeavoring to make solar installations as efficient and as effective as possible. Certainly, research projects presently being carried out at the New and Renewable Energy Centre (NaREC) will play a key role specifically mono and polycrystalline solar cell development which is set to take up the lion’s share of the British PV market in the coming years.
The prospects for the UK solar industry looked much brighter following the Energy Act in November 2008 and the establishment of the Department of Energy and Climate change (DECC) under the leadership of Ed Milliband. The UK government has committed to reach its climate change targets of reducing carbon emissions by 60% by 2050 through a series of legislative changes which will have a significant effect on investment levels in UK PV installations.
The UK PV market is growing at a rate of 25% per year and is expected to grow exponentially following the introduction the ‘Clean Energy Cash Back’’ feed-in tariff mechanism. At a recent renewable energy convention Joan Ruddock, spokesperson for the DECC, asserted the fact that the government will strive to develop the UK renewable industry through, “Small-scale renewable technologies, such as solar PV”, going on to add, “We know that it is not just a case of generating ideas and many of you have pushed for greater incentives, so we are introducing what is going to be called a clean energy cash back, that is much easier for ordinary people to understand than a feed-in tariff for people in these difficult economic times and it will be important to encourage people at this time.”
The prospects for PV in the UK are therefore looking strong and with consultants Ernst & Young declaring in a December 2008 report titled The Renewable energy country attractiveness indices, the UK ranks highly as a potential target for solar investors. Certainly, citing the low value of Pound Sterling and the imminent introduction of feed-in tariffs, Ernst & Young now rate the UK as joint fifth in a list of countries in terms of their attractiveness to investors. Of course, this report was published before the feed-in tariff which was introduced in April 2010, and the attractiveness of the UK solar industry would certainly be boosted by recent news pertaining to cash benefits to investors.