No sunny weather at 11am but I’m still smiling…
Wednesday 3rd October 2018 marks the day I was lucky enough to buy the solar panels that have graced my roof for the last 7 years. Like thousands of other fortunate UK residents, I rushed to get solar PV installed on my roof before the UK government’s feed-in tariff (FITs) dropped below 42.5 pence per kilowatt hour back in December 2011.
At the time I couldn’t afford the initial outlay, so the installer agreed to receive the feed-in tariff and I got the free electricity. I was very lucky as since then my electricity costs have remained static. I pay circa £300 per year for electricity on a 2-bed terrace and I’m on a green tariff, but, I know others have been less fortunate.
Let’s pose the question - were the government right to invest in these technologies when they potentially benefit so few?
I can see now how very extravagant the original FITS (pre 12th December 2011) payments were for those who bought their new technologies - it gave a lot more return on investment (circa 15% p.a.) than you’d get from even the best savings accounts today (2.75%). For a system that cost £10K to install, it should return upwards of £37,500 over its 25 year lifetime. However, there will probably only be an additional £500 of expense in terms of a replacement inverter half way through the life of the panels. How can that be right? A minimum of £37.5K return on a total £10.5K investment? Is it right for a select few to be making a profit from going green?
Looking at an assessment written in 2015 for DECC of the impact of FITs, the cost per Megawatt Hour (MWh) of energy produced was rated at £261 per MWh (in 2013-14). In comparison, new nuclear production costs £92.50 per MWh and new offshore wind £57.50 (by 2022-23) . At the very least, a better approach may have been to fund installations for those who could not afford them, rather than (as ever) expecting a broken market to fix a problem with an incentive package most likely to be accessed by those that have the cash to access it - and not by those that don’t :o(
So, what is the best solution? Moving forward, the most equitable investments with the best ROI for both the government and for us are clearly offshore wind. I’m not even considering anaerobic digestion, hydropower and other technologies in this assessment. STOP PRESS - it turns out that this is what the UK government are now committing to (edited March 2019).
Offshore wind is better than supporting micro-generation (financially) and definitely better than nuclear (both financially and environmentally). But, despite this, there’s no accounting for the positive behavioural benefits of having your own micro-generating systems - before you know it, you will become a RENEWABLE GEEK! How many folks do you know who know the energy ratings of their appliances off by heart?!
So, would I have solar panels fitted without the feed-in tariff? Not necessarily. But, with the price of the installation probably closer to £5,500 in today’s money (solar panels have reduced in price by around 75%) and with a £300 saving on electricity each year, a solar installation still gives a better ROI than the best savings accounts out there!
So, what can you do? The feed-in tariff completely ends in April 2019. Despite being vastly reduced from its starting point (down to just short of 4p per kWh) if you are half-thinking of a solar installation and have a decent roof then now is the time to do it! If cost is an issue, consider renting out your roof - this still leaves you with the benefit of cheaper electricity bills and the option to become your own GEEK!
P.S. The sun did come out eventually!
P.P.S. This is how much of a geek I am, I just read my electricity generation meter for the second time in two days (!) and I can announce that I’ve generated 5 whole kWhrs of energy today for which I will be paid £2.64 pence through the FITS scheme and I’ve just run my fully-loaded dishwasher on it. Bonus. ;o)
 The 42.5 pence was a guaranteed minimum amount – in actuality the FITS payments track the RPI so right now (3/10/18) they are worth 52.75 pence per unit.
 See www.runbythesun.co.uk for details.
 The best interest rate for a fixed rate bond on 3rd October 2018 is given as 2.75%. The ROI for my solar panels is around 15% per year on the old FITs scheme (pre-2011) and this doesn’t even include the saved costs of the free electricity. Moneyfacts.co.uk (2018). Best savings rates. https://moneyfacts.co.uk/savings/best-savings-rates/ Accessed on 3rd October 2018 at 11.56am
 Solar installations were awarded a 25 year FIT rather than 20 years for all other renewable technologies – I have no idea why! Powerful solar lobby perhaps?!
 Nolden, C. (2015). Performance & Impact of the Feed-in Tariff Scheme: Review of Evidence. Science Policy Research Unit on behalf of DECC: London. Available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/456181/FIT_Evidence_Review.pdf Accessed on 3rd October 2018
 BBC News (2017). Offshore wind power cheaper than new nuclear. https://www.bbc.co.uk/news/business-41220948
 Berners-Lee, M. (2010). How Bad are Bananas? The Carbon Footprint of Everything. London. Profile Books.
 Moneyfacts.co.uk (2018). Best savings rates. https://moneyfacts.co.uk/savings/best-savings-rates/ Accessed on 3rd October 2018 at 11.56am
Emma hopes to inspire by writing about her own sustainability journey - please share your own experiences below.