On a sunny autumn afternoon in September last year Claire Perry, Britain’s climate change minister, cut the ribbon to officially open Clayhill solar farm near Flitwick, Bedfordshire. The farm, the first built in the UK without being propped up by the government, will provide power for 2,500 homes. It was an historic moment.
An Historic Moment for UK’s Renewable Energy
Perry said: “The cost of solar panels and batteries has fallen dramatically over the past few years, and this first subsidy-free development at Clayhill is a significant moment for clean energy in the UK.
“Solar panels already provide enough electricity to power 2.7 million homes, with 99% of that capacity installed since 2010.
“The Government is determined to build on this success and our ambitious Clean Growth Strategy will ensure we continue to lead the world on the transition to a low-carbon economy.”
A Power Crunch
Solar power is sizzling in the UK. A boom in solar panels over the past few years, with demand fuelled by government subsidies and research, is feeding power directly into people’s houses or the local electricity grid, which is cutting demand on the country’s creaking national system — the UK faces a significant energy supply crunch over the next few years as coal plants are taken offline without sufficient replacements.
For instance, during Britain’s bank holiday heatwave in May 2017, a new record for solar power generation was breached. The country’s solar panels scorched a previous record by generating 8.7GW of power, more than nuclear and coal power combined. Solar power was the second most used energy generation technology after gas-fired power and accounted for 25% of the UK’s electricity, the highest share ever. The UK has about 12GW of solar power in place, with the equivalent production capacity of eight nuclear reactors.
The white-hot demand for solar power means than 60% of the UK’s power was low-carbon, when including the nation’s wind farms and nuclear power stations, higher than the usual 50% figure.
Paul Barwell, the chief executive of the solar trade association, said: “This is a colossal achievement in just five years, and sends a very positive message to the UK that solar has a strong place in the decarbonisation of the UK energy sector.”
Funding Cuts Cause Concern
While subsidies have largely fuelled the solar power boom in recent years, the UK government turned off the funding tap for new solar projects through its Renewables Obligation scheme in April 2015. The government cut financial aid by 65%, despite a review suggesting the cuts would put 18,700 jobs at risk. In real terms, this means it would pay rooftop solar installers 4.39p per kilowatt hour instead of the previous 12.47p. There will likely be a quiet “grace period” with new projects hitting a dead end over the next two years.
Regulation has caused bumps along the road to Britain’s solar power success. The governments subsidy cuts dismayed investors who, making long term bets, were uncomfortable with the level of support changing over the lifetime of a project, adding significant risk to their investment.
Barwell said: “Closing the renewables obligation for solar is not in the interests of bill payers when solar is soon to become the cheapest low-carbon energy source. Following the Paris agreement, this needs rethinking.
“Removing the grandfathering guarantee [which ensures that any subsidy levels are protected for the lifetime of a project] makes no sense for solar — it’s the thin end of the wedge. If you invest £1 million of capital into a solar project today, in 20 years’ time you have still invested £1million — it is a sunk cost. You cannot have the level of support changing over the lifetime of a project as investors won’t take the risk.”
Solar Power Absent from Budget
In the UK’s November Budget, solar power was conspicuous for its absence in any major policy announcements. The government did not mention its decision not to provide any further levies for low carbon power sources until 2025.
Britain’s Office for Budget Responsibility in fact revised its forecast for environmental levies downwards. The Office forecasts spending on environmental levies to decrease by £0.2bn to £0.3bn each year until 2020/21 and a steeper £0.5 billion thereafter.
Liam Stoker, editor of the Solar Power Portal, wrote in a blog: There is also continuing uncertainty over the government’s tax framework for energy saving materials, with no clarification over some of the issues.”
The Sun Saves Money
Nevertheless, the cost of solar energy has fallen dramatically, shoring up its demand among the UK population. Saving money is one of solar power’s enduring appeals for British consumers — and those in other parts of the developed world. Solar power is an up-front investment, with the only cost being the installation of a system and, of course, any added electricity costs in the event that your panels do not supply all your household energy needs.
According to estimates by Energysage.com, the cost of installing a 5KW solar power system in the US ranges from about $10,000 to $15,000. The savings over 20 years are up to $30,000, with the minimum saving being $16,000.
Other consumers are motivated not only by saving money, but by contributing to improving the environment by reducing greenhouse gas emissions. The Environmental Protection Agency provides a formula for calculating carbon emissions reductions: a 3KW solar power system producing 4,260 KWH can result in a carbon emissions reduction of 2.9 metric tons per year. To put that into context, a typical car will emit 4.7 metric tons of carbon dioxide every year, according to the EPA.
The impact — financial or otherwise — of a solar power system will vary significantly depending on whether the sun shines brightly in your location. One challenge the UK faces in becoming a solar energy powerhouse, then, it’s its notoriously grim weather.
Bad Weather a Hurdle
Chris Goodall, who penned a book about solar energy, told The Guardian that March is a particularly good time for solar power in Britain because of the angle of the sun, and the fact that panels work better in lower temperatures.
He said: “A sunny day between the equinoxes can now produce a peak of around 9.5GW. At weekends, when demand is low, this will frequently mean solar is producing well over 25% of the UK’s power needs.”
Goodall added that at weekends in the summer, and on windy and sunny days, he expected fossil fuels to provide a meagre 15% of the UK’s total energy power — and that percentage could fall to zero as new offshore wind-farms are completed.
Lukewarm Business Demand
While consumers have warmed to solar power, one market segment showing lukewarm demand is business. Organisations are failing to use energy effectively, with the CBI estimating that businesses could reduce their costs by 15% if they did so. Solar power remains one of the most effective ways to do that.
In a report, analysts at Centrica Business Solutions argued “that energy can play a central role in unshackling businesses and tackling persistent challenges, such as productivity. The UK is the world’s fifth biggest global economy and has world-leading sectors and record employment levels, but productivity was 17% below the G7 countries in 2015 and lagged behind France by 30%”.
The report stated that the UK economy could be boosted significantly if new, commercially-viable energy solutions — such as solar power — were adopted. Such sources of power could improve business performance, increase operational resilience and open up new revenue streams. In the industrial sector alone, savings of £540m could be made from sustainable power, the report said.
Solar Technology Key to Industry’s Future
Key to these savings being realised is technology. Solar power and other renewable energy sources could benefit greatly from artificial intelligence, which could overhaul the way solar panels are deployed. For instance, AI could be used to conduct and accelerate due diligence, reducing the time it takes to analyse solar power investment decisions, according to a report by consultancy firm DNV GL. In addition, advanced autonomous robots can reduce consumer and business costs by conducting remote inspection and maintenance of solar panels — spotting expensive faults before they occur, the report says.
Lucy Craig, director for technology and innovation at DNV GL, said that AI could create new operating efficiencies and disruptive business models.
Elizabeth Traiger, co-author of the report, added: “Solar and wind developers, operators and investors need to consider how their industries can use it [AI], what the impacts are on the industries in a larger sense, and what decisions those industries need to confront.”
At the heart of technological advancement is data, with companies tracking, monitoring and evaluating digital information from solar projects in an ultimate bid to make solar power cheap enough to compete with traditional fossil fuels like coal.
If the UK succeeds in doing so, it would not just make energy cheap for all, it would help transition the world from generating carbon emissions that are warming our planet to a dangerously high degree. It is up to consumers and businesses to change their habits before it is too late.