Solar Energy provision in the UK is experiencing a boom as we near the middle of 2023. With the price of wholesale fuel fluctuating wildly, energy bills rocketing and natural resources becoming more and more scarce.
Solar Power in The UK - The Fall and Rise of an Industry
Article from | Robert Cathcart
Solar Energy provision in the UK is experiencing a boom as we near the middle of 2023. With the price of wholesale fuel fluctuating wildly, energy bills rocketing and natural resources becoming more and more scarce, we can all see the reasons people are looking to produce their own electricity. And, while we’d all like to believe that solar panels popping up all over the country is the result of people becoming more conscious of the green issues and global warming, the bottom line here is money.
The good news is that, whether people are environmentally minded or not, Solar Power is becoming a huge industry in the UK. The technology is getting better, people are much more informed, and the advantages are obvious. The cost of installing a solar system in your home has reduced by over 80% in the last decade and, the more people sign up to it, the cheaper it’s going to get – supply and demand.
But, it hasn’t always been this way.
UK Solar History
The year is 2010 and the UK government is looking for ways to boost the take up of renewables and reduce Britain’s reliance on fossil fuels. By the beginning of 2011 they had 2 schemes running to incentivise both the public and businesses to invest in renewable energy – the Feed In Tariff and the Renewable Obligation Certificate.
The Feed in Tariff
Also known as the FiT, it was introduced in April 2010 and used to encourage the expansion of domestic solar …. and it worked, for a while. The original idea behind the FiT scheme was to pay anyone generating renewable electricity a set amount for the power they produced.
Eligible installations had to be either Solar photovoltaic (solar PV), Wind, Micro combined heat and power (Micro CHP), Hydro and Anaerobic digestion (AD). And have a capacity of up to 5MW, Megawatts or 2kW Kilowatts for Micro CHP.
The scheme was open to anyone included generators, people who owned accredited installations and FIT licensees who registered applications and made FIT payments.
There were 2 ways to earn, a ‘generation tariff’ where households were paid for a rate for each unit (kWh) of they generate … and the export tariff where each unit (kWh) exported to the electricity grid was paid for.
Generators were typically paid 45.6p per kWh and the costs of the scheme was spread across all licensed electricity suppliers in Great Britain through the ‘levelisation’ process, based on their share of the market.
FiT contracts were for 10 to 25 years and many households in the UK still have them.
Renewable Obligation Certificate
The Renewables Obligation scheme came into effect as early as 2002 and was created to encourage electricity generation from renewable sources. Electricity suppliers were obligated to show Ofgem Renewables Obligation Certificates (ROCs) for every megawatt hour (MWh) they had supplied to customers every year. If a supplier had not reached a specific target, they could make up the short fall by paying into a ‘buy out’ scheme.
Solar In The UK from 2010 - 2015
It is no surprise that the interest in solar really took off in 2010 with figures for solar installations reaching nearly 29,000… an incredible increase on the year before which was just 4,500.
In 2011, that number rocketed to almost 250,000 as people started to make some serious money by installing solar on their roofs, around factories and on farmland. Good for the people making the money but the success of solar was its undoing.
Eventually, the boom stopped in 2015 when the FiT tariffs were reduced, in legislation, and the rates people were getting paid started to drop dramatically. This directed affected the domestic sector as households could no longer break even on their investment quickly.
It did give a slight advantage in the large scale, utility level solar installations and they became more profitable – if you had the room, you could make a killing by selling your electricity back into the grid.
Decline in Solar Take Up in UK Post 2015
Much like the UK’s double glazing ‘White Gold’ boom in the 80s, the solar boom of the 2010s was over by 2015, and there were 2 main reasons for this.
The huge decline in domestic installation was mostly blamed on the fact that households could no longer rely on a tidy profit from the power their solar systems produced. Prices for Feed in Tariffs dropped as low as 6.61p per kWh for the typical, family home. On top of this, a lot of installers were not registered, professional or ethical. High pressure sales techniques were often used to sell customers shoddy, overpriced and low efficiency panels. Polycrystalline panels were the norm, and these are no longer used in domestic installs in the UK as their efficiency rates mean you need a more panels than would fit on the average roof to generate enough electricity for your home, never mind selling it.
As for commercial installations, in February 2016, the government restricted the number of new sites that could be accredited under the scheme each in ‘tariff period’ … which for most types of generation tech was three months. With less scope for a sure-fire investment, the solar farm building stated to drop dramatically.
On top of all the regulation, red tape and cowboy installers, there was also competition from fossil fuels, nuclear and other, less intrusive renewables like wind, and Solar started to wane in it’s popularity.
The Reinvention of the Solar Industry
Fast forward a few years to 2019 when the whole world got shut down by Covid-19 and the surprise winner from everyone being at home was Solar power.
One could opine that, as people had more time on their hands, they were getting more interested in renewable energy, or it could have been the fact people were at home more and the energy they used was increasing their bills, or maybe everyone just enjoyed the cleaner air that came with less traffic and industry.
Whatever it was, people were becoming interested and various bodies had been talking to the government about ending the FiT scheme to replacing it with something else. The good news for the customer was, solar energy equipment had dropped in price by almost 80% in the 10 years since 2009.
Regulation
FiT was replaced in 2019 by the SEG, Smart Export Guarantee, that put a legal obligation for energy suppliers to offer home generations a buy in tariff, the downside was that the energy companies could set the price at which they bought the electricity. Of course, some suppliers weren’t in the list bit interested in buying energy from private generators, so they offered very small incentives like 1 to 2p per kWh.
On the other side of that coin, newer suppliers were marketing themselves as 100% renewable energy providers, so they are still encouraging customers with variable tariffs that can pay as much as 40p per kWh.
The Future
The future is so bright we’ll have to wear shades, and those panels will be pumping our sustainable energy for everyone.
Ok, that might be a bit optimistic but, in the last 2 years, we have seen a massive increase in domestic solar. Industry analysts have put this down to panels becoming more efficient, battery storage dropping in price while rising in capacity and the scarcity/price of fossil fuels. Throw in green issues become more prominent and the war in Ukraine to finish the perfect solar storm.
The company I work for, Solar Fast, was named the 180th fastest growing company in Europe by the Financial Times for the period 2021 – 2022, which made us the fastest growing solar provider in the UK, which is a fantastic indication that the industry is going from strength to strength.
This trend shows that, while subsidies can help an industry to get going, that industry cannot rely on them for ever and, post subsidy, the UK domestic market is steadily increasing year on year, following the predictions made by Solar Portal in 2021.
About Robert Cathcart
Robert Cathcart is Yorkshire-based renewable energy researcher, copywriter and blogger. With over 20 years experience in copywriting he has turned his attention to ecological issues and the green revolution. Specialising in Solar Power, Robert aims to inform, educate and inspire.
The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag
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