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UK Feed-In Tariffs Make Solar Roof Projects a ‘Safe’ Investment


Alt Dot Energy
March 30, 2009


Renting people’s roofs to deploy solar panels could be a safe source of income
for Pension funds, under renewable feed-in tariffs set to come into force in
April 2010 in the U.K. Jeremy Leggett, the executive director of one of
Britain’s largest suppliers of solar photovoltaic energy systems, Solarcentury,
certainly thinks so.

Mr Leggett was speaking at an industry conference held in London on Thursday,
focussing on the new tariffs that the U.K. government is to introduce next year.

As is already happening on the Continent, the extensive life-span of solar
panels and the income from both electricity sales and the long-term feed-in
tariff subsidies could make the technology a favourite of pension fund
investors. Once the initial loan has been paid off - during their working life -
the Solarcentury boss said French householders could get thousands of pounds of
income a year from their solar panels.

“This is safer than government bonds - in France, it’s already a pension for
those guys. It’s also a hedge against future electricity prices. I’m really
bullish about very large demand coming - and elsewhere where there will be
multi-MW installations in sunny areas.” said Mr Leggett.

Pension funds are moving around Germany already, offering householders rent for
their roof space, while in France householders can get low-cost loans for solar
systems they can personally use as a pension.

Feed-In Tariffs

The renewable energy industry has suggested that a long-term feed-in tariff of
around 42.5p per kWh of power generated should be brought in for photovoltaic
systems, with a 7.5p per unit premium for building-integrated systems (see this
New Energy Focus story).

During his presentation to the Renewable Energy Association’s feed-in tariffs
conference on Thursday, Mr Leggett said global solar PV costs had halved in the
last few months, adding that the technology would be comparable to average grid
electricity costs in the UK by 2013 at a household scale and by 2021 on an
industrial scale.

With a stable feed-in tariff, he said Britain could catch up with the likes of
Germany, which is forecast to reach 2,000MW of installed solar capacity this
year compared to 6MW in the UK.

He spoke of his frustration at the perception that solar PV systems don’t work
in the UK - revealing his surprise that solar photovoltaic technology does not
feature at all in the government’s predictions for energy generation in 2020, as
detailed in the Renewable Energy Strategy.

“The government’s own consultants - Element Energy - agree with me, and they are
independent consultants,” Mr Leggett said. “They said the opportunities for
investment in PV in the non-domestic stock is enormous - over 30GW.”

As the UK seeks to pull itself out of recession, the Solarcentury executive
director also pointed to the 20,000 to 40,000 jobs he said could be created in
delivering solar power in this country.

“It may seem bizarre to be saying this in 2009, but solar PVs can be the
backbone of a sustainable future in 2020,” he said.

Speaking at the same conference, Solar Trade Association chairman Howard Johns
also said the feed-in tariffs being introduced for renewable heat - expected to
start in 2011 - would also be a “huge” opportunity for solar thermal companies.

“Solar thermal has been unanimously ignored by government policy for 30 years,”
he said. “But we are going to go from 120,000 installations to seven million in
nine years’ time.”

 

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