What’s the future for Solar PV following recent Feed in Tariff(FiT) cuts?

Why you should use the electricity you generate on site yourself

Let’s be clear, Solar is, and always has been, a great way for homeowners & businesses to save money.

However, over the last 6 years, the Solar PV industry and consumers have focussed onSolar PV and the FiT from an investment and ROI perspective. Both the industry and customers should now view the benefits of solarpv differently; primarily as an environmental sound and sustainable source of low cost energy for consumers.

There’s a growing realisation among residential and business consumers that the key to maximising the benefits of Solar PV systems is to consume as much of the Solar PV electricity generated on-site as possible, because avoiding energy costs now has a higher return on investment than the FiT:

  • The FiT pays the Solar PV electricity generator 6.8p for 1kWh, depending on the system size

vs.

  • The savings from not buying 1kWh(unit) at 15p/kWh are more than twice this.

Most electricity suppliers increase their prices annually, by around 5%. Solar PV generated electricity is a fixed cost for the life of the system, so the PV owner is also hedging against future price rises over the 30-year life of their system.

So, how can Solar PV owners maximise their consumption of Solar PV electricity?

There are a number of options available to help consume Solar PV generated electricity rather than let it flow back to the national grid.

One technology that is gaining increasing popularity is battery storage.  People are curious about how they can store or use electricity rather than letting it return to the grid.  They know about batteries, so increasingly it’s something that comes up in conversation.  Most people are aware how mobile phone batteries have improved in performance over the last few years and how Tesla and other electric car manufacturers are using similar Li-ion technology to power their electric cars.

However, Li-ion technology is expensive on the scale required to store any meaningful amount of electricity for use when the Solar PV stops generating.

Many of our battery storage customers start-off looking at Li-ion but tend to opt for lead acid batteries in the knowledge that they have a useful life of approx 5 years during which time the price point of Li-ion batteries is expected to fall due to manufacturing scale and research.

People are very keen on immersion heater devices; they are an easy “add-on” to solar PV owners’ existing electrical systems.  They work by diverting electricity that starts to flow back to the national grid to heat water in the hot water storage tank, converting surplus solar PV energy to stored heat energy.

During the summer customers’ boilers tend to cycle when producing hot water in the morning & evening.  Many Customers switch off their boiler for the summer,which reduces wear & tear on it and let their solar PV system heat their water up.  The boiler’s still there for back-up if required.

Voltage Optimisation (VO) is a less well known technology where customers install a “step-down transformer” which reduces the incoming voltage from 240V to 230V in keeping with the rest of Europe. Most household appliances operate quite normally at this voltage and so will last longer than if they operate at a higher voltage.  There is also a potential reduction in electrical costs of 10% – 20% depending on what electrical goods are in regular use in the household.

Devices that help consumers increase their “self-consumption” of Solar PV generated electricity are increasingly popular with Solar PV owners who have got used to the return from their feed-in tariff but have come to realise they can improve the overall return from their Solar PV systems and the general energy efficiency of their homes by using more of the energy they are producing.

For more information on any system mentioned here, please get in touch today.

Things to know before intalling a solar pv system

Installing a Solar PV system in your home

There are a wide variety of questions our clients have asked us about over the years, so in this article, we aim to help and advise you with some key points you should be aware of BEFORE you buy.

Our free local site survey will determine which system is best suited to your specific needs of those of your property. It is very rare for properties in the Cambridgeshire area to be affected by more than one of these factors which is why we are confident that any solar PV system we specify will be perfect for you.

What you need to know about Solar pv energy

In the UK, our climate is seasonal so the strength of sunlight will vary throughout the year, as does the temperature. Both these factors affect the ability of a solar PV panel to produce electricity.

Here are some important factors that will affect solar PV power generation.

Sunlight: How much do you get?

Your location will determine how much sunlight you receive. The Southwest gets more than the Scottish Highlands for instance. The Government publishes estimates of the output of solar systems across the country using your post code along with the orientation of your pv system relative to South, plus the angle of the roof.

This gives you a reliable indication of the output of your system, the Feed in Tariff (FiT) payments you will receive and the return you can expect from your Solar PV investment.

Sunlight and Solar radiation in different UK regions and times of year.

Solar radiation map of the UK

Daily sunlight intensity over a year

Solar radiation map UK

Solar Intensity Map

Average annual rainfall:

When it’s raining heavily the sunlight has very little chance of penetrating both cloud cover and a virtual water barrier to reach the Solar panels and generated electricity.

Cloud cover:

Cloudy and rainy regions will receive less sunlight than those without rain & clouds. This doesn’t automatically mean that Solar PV panels are a non-starter though as Solar PV panels will typically produce electricity from “diffuse” sunlight even if this is only 20% of optimum levels.

Air density:

Higher altitudes have better exposure to sunlight than those at sea-level. This is simply because the air is thinner at higher altitudes so sunlight is less scattered.

Average annual temperatures: Hotter is not always better

The silicon cells in solar PV panels are semi-conductors. These are more efficient at lower temperatures, so if you live in a very hot area (in summer) this may be a factor to consider. A 5 degree increase above 25 degrees will lead to a 1% reduction in output.  So in the Gulf states where temperatures can exceed 40 degrees they always install additional panels to compensate for this.

Wind: Ensure panels are properly mounted

If you are in an exposed, windy spot, mounting the solar PV array properly is paramount. Wind can damage both the equipment and reduce energy output and therefore your financial returns.  So again, ensure you use an experienced installation company who offer solid guarantees on their work.  We calculate the wind-loading forces on solar arrays to ensure they will be stable in any circumstances and install them in accordance with manufacturer’s instructions to minimise the effect of wind, flexing the panels and creating damaging micro-fissures in the solar cells that result in reduced output

Shade: Sunlight impairment reduces output

Are you in a heavily built-up area or one that is overlooked by tall trees or buildings?  When the sun goes behind a tall building, direct sunlight reaching the panels is reduced; this means the output of the system is reduced.  In the winter the numbers of daylight hours are less, further reducing output.

How obstructions impair sunlight reaching your solar pv panels

Sunlight impairment diagram

So is Solar pv right for you?

None of this means that solar pv won’t work for you, but as part of our service, we offer you a free site survey to assess the most suitable system for your specific location.

Possible mounting points for solar PV panels

House roof pv mounting positions

 

Do the numbers stack up for you? Find out here

To determine how suitable your home might be for solar PV & estimate the likely returns, enter your information
into our free and instant online solar PV output calculator.

 

Calculate solar output from any size of solar pv installation
Click to calculate

If you would like to talk to us about a site survey, you can request a call back or simply contact us by email.

 

Commercial Rooftop Solar PV systems.

The case for commercial rooftop solar PV has historically been constrained by concerns about short-term return on the capital employed.  We believe that there is now a clear and compelling economic case for its widespread adoption.

The cost of solar PV equipment has reduced significantly over the past 3 years and even though Feed in Tariffs (FiTs) have also fallen, the potential savings from producing your own electricity versus the rising cost of buying grid electricity have actually increased.

Also, many businesses are concerned about energy security.  Instability in the former Soviet Union, which supplies a lot of the Gas that Europe burns to produce electricity and the retirement of some of the UK’s coal fired power stations before replacements are built has brought the threat of blackouts which threaten business continuity.

The opportunity in the UK for commercial rooftop solar PV is vast, even without taking into account the inevitable long-term price increases of traditional grid-supplied power. If you factor in the potential to make our existing buildings more energy efficient to reduce electricity consumption, the impact on individual business’s operational costs and “UK plc’s” bottom line are potentially huge.

Generally, there are 2 ways that businesses fund rooftop commercial Solar PV

  1. The building owner/user installs the Solar PV electricity generating system using their capital.

The building owner/user is paid the FiT contract payments and uses the electricity they produce, reducing what they buy from their existing electricity supplier.

Once installed Solar PV generated electricity is a fixed cost, whilst Grid electricity generally increases each year (5%+).  Therefore, the solar PV generated electricity becomes more valuable over time.  Any Electricity not consumed on site is “exported” to the grid and the owner is paid an export tariff under their FiTs contract.

Solar roof top systems make the best business returns when the majority of the electricity produced is consumed on site.  Returns of 10 – 15% are possible from solar roof top projects where 50% or more of the electricity produced is used on site.

Production of on-site electricity also serves to fix that element of operational costs for the 20 year life of the FiT contract and the remaining 10 – 15 years life of the panels.  If the solar roof top system is 50 kWp or smaller, installation is deemed permitted development, not needing planning permission.  However, if planning is required it is unlikely to be refused as Government climate change strategy encourages the installation of solar PV roof top systems.

For example if a 50 kWp system is installed on a farm, where some farm buildings have been converted for mixed use as offices, workshop, or light industrial as well as traditional pig, poultry or dairy farming, this mixed use will mean demand is spread over the day and across the year.

A 50 kWp system using tier 1 equipment will cost approx £50,000 and generate approx 50,000 kWh of electricity a year.

Income from Solar PV generated electricity 
FiT generation tariff income on 100% of output @4.39p/kWhr 2195
FiT export tariff income, on 25% of output @ 4.91p/kWhr 632
Value of 75% of Solar PV electricity @ 13.0p/kWhr*** 4875
System value 1st year 7702
Return on investment 1st year 15.40%

 

*** business uses 75% of system output, therefore not buying same from grid supplier @ 13p/kWhr.

  1. An investor installs the solar PV system; NO capital investment for the building owner.

In this case an investor installs the solar PV system and takes the FiTs payments.  The investor sells the electricity generated by the PV system to the building owner/users at a lower price than they buy electricity from their main grid connected supplier.  Government FiTs contracts are index linked to RPI inflation for 20 yrs, contracts between investor and consumer are typically 20 – 25 yrs.

This solution allows businesses to immediately benefit from reduced electricity bills, index-linked to inflation, and reduced supply risk – without any capital investment or maintenance overhead whatsoever.

If the building owner pays 13p/kWhr for electricity from their grid supplier and 6.5p/kWhr for the Solar PV generated electricity this will mean that they save 50% of their electricity cost on every unit they buy from the investor as soon as the system is operational.

If the investor is producing 75% of all the building occupier’s electricity needs they will make an immediate saving of £2437 a year.  This will continue for the life of the panels, at least 25 years, a total saving of at least £60,000, not allowing for inflation on the cost of the supplier’s electricity.

 

Income from Solar PV generated electricity

Building users saving Building users 25 yr saving
FiT generation tariff income on 100% of output 2195
FiT export tariff income, on 25% of output. 632
Income from sale/use of 75% of Solar PV electricity @ 6.5p/kWhr 2437 2437 60937
System net value 1st year 5264
Return on investment 1st year 10.53%

(The output figures and possible cost of electricity are for illustrative purposes only)

To take advantage of a solar investment opportunity, call us now on 01480 819740, or request a callback using our form.


How to get hot water from your solar pv panels

Integrated Solar Photovoltaic (PV) systems and Hot Water Smart Switches

How can you use Solar PV generated electricity to heat water?

There are systems on the market which you can connect to your immersion heater and use excess Solar PV-generated electricity, which would otherwise be exported to the grid, to heat your water. These units monitor the amount of electricity generated as well as the amount that your home is using. When there is a surplus this energy is diverted to your immersion heater to heat water instead of being exported to the grid.

This type of system does not affect your FIT generation payments because you are still paid for exporting 50% of the electricity you generate regardless of whether you use it in your home or export it to the National Grid.

One of the Solar PV Smart Switches our Customers use.

Solar hot water switch

Here’s a Summary of how a Solar PV Hot Water Smart Switch works

  • The Smart Switch unit fits into your airing cupboard and connects to the immersion heater electrical supply; the example above measures 260mm x 130mm x 64mm.
  • The Smart Switch unit receives information continuously from a wireless sender device clamped over your house’s “live” supply cable.
  • The sender monitors the flow of electricity in and out of your house.
  • When there is surplus electricity flowing out of the house it tells the “Smart switch” to start using this surplus electricity to heat hot water.
  • This activates the system to start heating your water and adjust how much electricity is used to heat the hot water by only using the surplus energy generated by the Solar PV system – it doesn’t use any electricity from the National Grid.
  • It works with normal household immersion heaters rated up to 3kW. No modifications are needed.
  • You can override or program the unit for total flexibility.

No two households’ hot water use is the same, it depends on the number of occupants, how many showers they take, how long they shower for etc. Likewise the amount of solar PV electricity generated varies with the size of the Solar PV system and the amount of sunshine being converted into electricity at any one point in the day.

Hot water use and available electricity will affect how long it takes to achieve a return on the cost of the Smart PV switch. Below is a typical example of the costs and savings in an average UK home.

Typical cost savings from a PV solar hot water system*

  • The average house with a 4kWp Solar PV system is estimated to produce 3600kWhr of electricity a year and is deemed to export 50% of this annually.
  • The average hot water cylinder is 150 litres and the energy required to heat the water in it to 60 degrees C is approx 9kWh. If you pay 15p/kWhr for your electricity (inc standing charge & VAT), a tank of hot water would cost:

9kWh x 15 pence/ kWh = £1.35.

  • If you heat your hot water by electricity every day (at £1.35/day) this will cost £493/yr.
  • The Solar PV system is most productive during the April – Sept. It should provide enough surplus electricity for the smart switch to use to heat your hot water. So you will save ½ of £493, i.e. £246 a year. There will be surplus electricity which can be used by the smart switch Oct – Mar but possibly not enough to heat a whole tank.
  • Some days the tank will retain enough hot water to only need to be “topped-up” with Solar PV generated electricity.

An average cost to supply and fit a solar PV hot water switch with a Solar PV system is around £400. So in 2 years you will have recovered the cost of the unit and started to make significant savings on your hot water bills.

To talk to one of our Solar PV experts about a installing a photovoltaic system with a solar PV hot water switch, please call us now on 01480 819 740 or use our request a call back form.

Does Solar Panel Efficiency Matter?

Solar Panel efficiency explained

What do we mean by efficiency?

When discussions about solar panels occur, the subject of efficiency usually comes up.
But what is meant by Solar Panel Efficiency?

Solar cell and solar panel efficiency are different

Solar panels are made up of individual solar cells; typically 60 cells/panel arranged in 6 columns of 10.  It is the solar cells that produce the electricity; the rest of the solar panel simply provides support for the cells or gathers the electricity to pass it on to the next solar panel in the solar PV system.

Solar cell efficiency is the rate at which a solar cell converts sunlight into electricity. Cell efficiency is measured in Watts/M2.   Cell efficiency will always be higher than panel efficiency because 1M2 of solar panel also has a frame and there are gaps between the cells, neither of which produce electricity.

Types of solar cell

The most common solar cells are: monocrystalline silicon (mono), where each cell is made from a single silicon crystal or polycrystalline silicon (poly) which consists of multiple silicon crystals.

When we started installing Solar PV systems 4 years ago there was a clear difference in efficiency between mono and poly cells, with mono being approx 15% efficient and poly approx 13% efficient.
Today, both types of cell have roughly the same efficiency at approximately 15%.  Advances in manufacturing now produce cell efficiency of up to 18% but the majority of panels are 15% – 16% efficient.

There are other types of solar panel available such as thin film, hybrid or copper backed panels, which are up to 20% efficient.  These are often used in specific applications such as when there’s a shortage of space.  However we’ll focus on mono & poly solar panels: if you’d like to discuss this please call us.

How important is efficiency?

In some ways it doesn’t matter.

If one panel is less efficient than another you just need a larger area to produce the same amount of electricity.  250kW is still 250kW regardless of the space used to produce it.

If space is not at a premium, then there is no need to choose high efficiency panels, instead you should look at factors such as cost and product reliability when choosing your panel.  However if space is a premium, then it is worth considering higher efficiency panels, although these may cost more, they will be your best choice.

So, what does this all mean when choosing a solar panel?

For large roofs, using a more efficient panel you will get a higher capacity system installed and generate more electricity. This in turn means more income from the system.  However, it will be more expensive to install, giving a lower return on investment (ROI) than a lower cost and lower efficiency solar PV system.

Costs involved in solar PV system installations

Solar panels and inverters make up approx 60% – 70% of a Solar PV system’s cost.  However there are other costs in a solar PV installation:

  • Scaffolding to work safely on the roof
  • Labour is the same cost per panel irrespective of panel efficiency

On smaller roofs these fixed costs represent a disproportionately high percentage of the overall cost of the system.   So In this case more efficient panels will have a higher installed capacity, generate more electricity and income, but also have better rates of return on investment compared to lower output panels.  For larger roof areas, a lower efficiency panel system might make more sense.

Property survey

To ensure the optimal choice and location of panel and inverter, we always visit the property to carry out a site survey so we can advise customers on the ideal system for their building and budget.

Other factors you will want to consider

Solar panels are available in different colours, blue or black cells; also there are black EVA backing-sheet and frame or standard white EVA and anodised aluminium frame versions.

The choice is not all about looks either, as panel temperature has a significant impact of on the cell / module performance.  A five degree centigrade rise in temperature reduces cell efficiency by 1%.

A full black panel will heat up more on a sunny day than a standard panel with an aluminium frame. The extra heat produced will reduce the black panels output. This is why commercial applications such as solar farms will use standard aluminium framed panels with white EVA backing as they heat up less and maintain higher efficiency.

Black panels are often considered aesthetically appealing but they cost more and may give a lower output overall than an equivalent (and cheaper) aluminium framed panel. Aluminium framed PV panels therefore, offer the better choice for best ROI.

Next Step

For an informed and impartial discussion about solar PV panels, call us now on 01480 819 740.

You can also request a call back using our handy form.

Solar energy panels the cost effective solution

How Solar PV panels pay for themselves

By investing in solar energy panels you could earn up to £1000, tax free for the electricity you generate at the same time as using as much of it you want.

Sounds too good to be true we know, but that’s not all. You can also save 25% off an average family fuel bill. The government backed feed in tariff scheme will pay you for every unit of electricity your solar energy panels generate.

Guaranteed for 25 years these tariffs will increase annually by Retail Price Index (RPI) inflation. You will also add value to your home, showing an income stream which will continue for the remainder of the 25 year contract.

Installation of your solar energy panels is simple.

Our experienced team are on hand to advise you. We will work with you to design the perfect installation for your property. A member of our management team will oversee the installation of your solar energy panels from start to finish. We ensure the work is completed on time and to your satisfaction.

We ensure that you are 100% happy with your installation once we leave.

For more information on the savings available from renewable energy,  watch the video from ‘The Energy Saving Trust’.

Do I need planning permission for solar panels?

Generally, no. The government has encouraged local planning departments to allow renewable energy installations. Go to our Solar Panels Planning Permission page for more information.

Solar PV Feed In Tariffs (FiTs) Summary

  • The level of feed in tariff paid to electricity producers is determined by by the size of the system and is set by Ofgem.  Ofgem review the amount paid for each unit of electricity generated on a quarterly basis.
  • Solar PV feed in tariff (FiTs) payments are set in a contract between the producer and the Government. The rate prevailing at the time of installation is set for 20 yrs.  Payments are increased annually based on RPI inflation in the December preceding the start of the new finacial year.
  • Feed in tariff payments are tax exempt for domestic installations.
  • The Government deems that 50% of electricity produced by a domestic solar PV installation is used in the home and the balance “exported” to the national grid. The exported electricity attracts an additional premium of 4.77p for each unit (kWh) exported.
  • All installations must be carried out by an MCS-approved installer, using MCS-approved products to qualify for the FiTs.
  • The installer provides the customer with a certificate to confirm their solar PV installation qualifies for FiTs. The customer provides this certificate to their electricity provider who pays them, on behalf of Ofgem and the Government for the electricity they produce.
  • All electricity sales organisations add a small levy to every unit (kWh) of electricity sold.  This levy funds the FiTs scheme.  So all electricity consumers(domestic & commercial) fund the FiTs scheme NOT Central Government.  The electricity sales companies hold this levy in a nominal account for Ofgem and apply to Ofgem to pay you from it when you claim your FiTs.
  • There are a finite number of domestic and commercial electricity users in the UK this determines the budget available to pay Solar PV Fits. The Dept of Energy Climate Change refer to this as the spending envelope.

If you would like to know more about how you can benefit from the Government incentives to install Solar PV please call us on 01480 819 740, email us via our website contact form or request a call back.

Carbon Reduction Commitment (CRC)

On 1st April 2010, the government’s CRC (Carbon Reduction Commitment) Energy Efficiency legislation came into effect.  The legislation applies to companies with at least one electricity meter settled on the half-hourly market. Organisations that use more than 6,000 megawatt-hours of half hourly metered electricity in 2008, equivelant to an electricity bill of about £500,000, will be required to participate in the scheme.

Participants’ emissions are used to rank them in a publicly viewable League table and they are expected to reduce their emissions year on year.  The CRC legislation includes civil & criminal charges for non compliance.

By developing a CO2 reduction plan incorporating Solar PV generated electricity companies can:

  • reduce their electricity costs, which will be increasingly important as energy costs escalate over time;
  • create a commercial opportunity to sell excess production for a higher premium than the Government’s “Export Tariff”;
  • demonstrate their commitment to their corporate environmental objectives;
  • protect their corporate reputation;
  • avoid CRC financial penalties;
  • allow customers to identify & select low carbon suppliers of goods & services.

This allows participant companies to gain competitive advantage.

Examples of Business use of renewables:

  • Analysts at a major high street retailer, that spent £70m on electricity in 2009, predicted that their electricity costs will increase to £120m over the period 2010 – 2020.  Their solution to manage this cost increase was to install Solar PV where ever possible on their stores’ roofs.  This is part of their “Plan A”.  Source: Ray Noble, Renewable Energy Association.
  • An EU wide meat packer with a turnover of >£500m has a site in Huntingdon which consumes £1m of electricity a year.  They have 3000m2 of roof area over three factories which could be used to install Solar PV.  To do this will cost approx £1.4m and will produce an income of approx £140k a year resulting in payback of investment in approximately 8 years & an annual ROI of 10%.

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