Current size of the UK PV market

Ofgem’s register tells us that in this current FiT year there have been 197MW of PV installed to date. Still to be added are more than 75MW of large-scale projects already connected to the grid, while an estimated further 15MW in projects were extended under the FiT loophole.
Most in the industry assume that Ofgem is three months behind in logging registrations. By adding the latest installation figures with the confirmed large-scale projects, deployments in this current FiT year amount to around 287MW.

We can also add to this figure a number of large-scale social housing projects with as many as 5,000 homes at a time that have recently started deployment. This is likely to raise the run rate for domestic installs considerably and, as we are half way through the FiT year already, it looks likely that the UK will exceed 550MW by year end 31 March 2012.

Remember this is just PV installs the other technologies are just starting to ramp up.

Urban Energy

Urban Energy are delighted that nearly half the population would like to install renewable energy technologies; what worries us is the lack of awareness surrounding it. To bridge the Green Gap it’s essential we continue to educate consumers and break down some of the myths surrounding the Green Deal, energy efficiency and microgeneration.

Urban Energy has earned a reputation as the south’s leading renewable energy specialist. This has been achieved by ensuring that from the initial point of client contact we offer 1st class customer service and care.

We only install products that lead the way within the renewable energy industry and that are renowned for their high quality and ecologically sound production. This reflects our own high standards and quality assurance.

We understand that introducing a renewable energy system to either your home or business is an investment that lasts for many years. With our in-house electrical and plumbing division it is our promise to you the customer that your satisfaction and peace of mind throughout this period is our number one priority.

For further information about Urban Energy products and services:

Call: 0800 232 1624

Email: info@urbanenergy.org.uk

Website: http://www.urbanenergy.org.uk/

PV & Feed in Tariff (FIT) - self fund or rent-a-roof option?

Everyone engaged in property matters will have come across the installation of photovoltaic (PV) solar panels, in order to reduce electricity consumption from the grid and to take advantage of Government’s feed- in-tariff (FiT) scheme. Social landlords and local authorities are making moves to undertake feasibilities and to commission installations. A key issue for their feasibility thinking is whether to self-fund installations or to do so via a third party, also known as the ‘rent-a-roof’ option.

How does each option work?
Self funding is on the face of it very simple, the property owner might choose to finance it with cash (savings) or a loan. Indeed with interest rates on savings and other ‘low risk’ investments so low, using spare cash to fund smaller PV installation and then collecting the FiTs that are generated from it, represent very good rates of return. However, larger installations may require the owner to borrow part of or all of the sums required to finance the installation. In such circumstances, with lending costs around 4-5%, this still represents a viable option, with typical PV installations giving returns of approximately 10% per year for 25 years - very attractive in today's market.

Rent-a-roof is a mechanism to facilitate funding of the upfront installation by a third party.  An investor will provide the funds necessary to undertake the installation; in return the investor will receive the vast majority of the FiT proceeds. This is established by the property owner granting a lease to the investor for the roof space, upon which the installation is fitted. The investors will typically be looking for returns in excess of other relatively low risk investments.

Assessing Feasibility
The starting point for any property owner thinking of installing PV panels through the rent-a-roof scheme is to contact the third party who will establish which properties are suitable, what the expected capital costs are and what revenue may be generated. The usual starting point is to undertake a desktop study where each property is assessed, via web-based imagery, such as Google Earth, to determine the suitability of the property for a PV installation. If the third party deems that they can make a good return on their investment they will send a sales team to validate the Google Earth survey by on-site surveys. The financial feasibility of any particular installation is a reflection of the electricity that it will generate.

This can be calculated for each property, by reference to:

- The size of the proposed installation
- The efficiency of the panels to be installed
- The expected amount of daylight hours that a property should be exposed to over the course of a year
- The orientation of the property, relative to South.

An algorithm will then calculate the amount of electricity that the installation should produce and hence the overall ‘income’ that is derived, made up of three things:

1) The tariff paid for the generation of the electricity
2) The tariff paid for selling surplus electricity back to the grid
3) The saving that the property occupier makes on using the generated electricity.

It would be usual to produce a cash-flow forecast, which would include the initial cost of installation and the forecasted ‘income’ over 25 years.

The forecast allows the property owner to:
- Assess in cash terms the revenue that would be generated.
- Assess the ‘attractiveness’ of the return, relative to other options.
- Determine if self funding or rent-a-roof might be the best option.
- The potential impact on the value of the property.
- The impact on others with an interest in the property.

The practical consequences of giving a long-term lease interest over the roof of the property, in the rent-a-roof option, must be carefully considered. While the lease will identify who has what rights and responsibilities, the involvement of a third party in the property will be an added complication, for example where maintenance has to be done to the roof, for home insurance quotes or potentially when the property is to be rented out or sold on.

- Where the property is tenanted, the lease or tenancy agreement may need changing to facilitate granting a lease under the rent-a-roof option.

Urban Energy

Urban Energy has earned a reputation as the south’s leading renewable energy specialist. This has been achieved by ensuring that from the initial point of client contact we offer 1st class customer service and care.

We only install products that lead the way within the renewable energy industry and that are renowned for their high quality and ecologically sound production. This reflects our own high standards and quality assurance.

We understand that introducing a renewable energy system to either your home or business is an investment that lasts for many years. With our in-house electrical and plumbing division it is our promise to you the customer that your satisfaction and peace of mind throughout this period is our number one priority.

For further information about Urban Energy products and services:

Call: 0800 232 1624

Email: info@urbanenergy.org.uk

Website: http://www.urbanenergy.org.uk/

UK - Renewable energy feed-in tariffs set to transform rural estate incomes

Some key facts:

- Rural estates and farms can generate significant extra income from renewable energy feed-in tariffs (FiTs)
- FiT payments are index linked and guaranteed for up to 25 years
- You can still claim FiTs even if you use the electricity yourself
- Most rural estates can benefit from some sort of renewable energy scheme

Rural estates and farms could use the new renewable energy feed-in tariff scheme to increase their annual income by tens of thousands of pounds each year.

A hypothetical “renewable energy” estate is described below utilising all the main forms of renewable energy – solar, wind, hydro and anaerobic digestion. also shown is how much income could be derived annually from each using feed-in tariffs:

• Two wind turbines (two 250kW** turbines wind speed of 7m/s) create an annual income* of £300,000 assuming all electricity produced is exported to the national grid.
• An anaerobic digester (350kW system 200 cows & 600 acres of maize) creates an extra £460,000 per year
• A modest hydroelectric scheme (100kW water turbine) adds £190,000.
• The contribution from photovoltaic solar panels (900 sq/m - 450 panels - on dairy roof) is £26,300

The total annual income came to £916,000 with a lifetime potential of £18,500,000!

*Income figures will vary based on local conditions and equipment performance. They do not include tax.

** A 250kw turbine produces an equivalent amount of energy to that consumed by 125 three-bed houses for a year.

If the electricity produced is used on the estate the annual benefit increases to £1.1m. This is because the estate will still receive the FiT payments, but will be saving on its current electricity expenditure.

Feed-in tariffs were introduced in the dying days of the Labour government and were designed to encourage people to create their own renewable electricity. An index-linked payment guaranteed for up to 25 years is made for each unit of electricity produced even if it used by the generator for their own consumption. The tariff varies depending on how the energy is being generated and the scale of the scheme. The smaller the scheme and the longer its potential payback, the larger the payment.

FIT rates:

• Anaerobic digestion 9.0 -11.5 pence/kWh over 20 years 
• Hydro 4.5– 19.9 p/kWh over 20 years
• Solar photovoltaic 29.3 – 41.3 p/kWh over 25 years
• Wind 4.5 – 34.5 p/kWh over 20 year

Add 3p/kWh for all electricity supplied to the national grid (large schemes can negotiate a higher supplement)

We have already seen a huge surge in enquiries from landowners looking to take advantage of feed-in tariffs. One of the most attractive things about them is that the payments are guaranteed for up to 25 years, which means it is now easier to get bank funding to set up renewable energy projects.

Reassuringly in the current fiscal environment, there is also no danger that FiTs will be hit by government cuts because they are funded by electricity generators (via our bills) not the exchequer.

Although it would be unusual for a typical rural estate to be able to utilise renewable energy to the same extent as our idealised estate, there are very few rural properties that cannot benefit from FiTs in one form or another. The estate shows the extent of the potential income available, even from relatively modest schemes. The wind turbines we are using, for example, are much smaller than those used in large-scale wind farms.

At a time when the income streams on many rural estates are under threat from poor agricultural commodity prices and falling farm subsidy payments, renewable energy will play an increasingly important role in securing a viable future for landowners and farmers.

Next year we should see even greater opportunities when details of the Renewable Heat Incentive are finalised. This will pay a tariff for heat produced by renewable sources and could be of real benefit to rural landowners who use a lot of heat themselves or who can supply heat to other users.

URBAN ENERGY
 
Our mission: “To provide and install, sustainable, world class, clean energy products with the highest level of service and care."

Urban Energy is an innovative organisation specialising in the financing, design and installation of economic and environmentally sound solar powered energy systems for commercial property (private and public) and domestic dwellings. Our expertise in the field of Government sponsored funding programmes and solar power products will provide individuals and organisations with an excellent opportunity to overcome capital cost barriers, save money on energy bills, increase profit margins, increase the value of their property and reduce their carbon footprint.

Urban Energy employ the very best engineers in this field, all of which are fully qualified, MCS certified and Government approved to carry out this task, complying with strict guidelines and are members of the Solar Trade Association.

For further information about Urban Energy products and services:
Call: 0800 232 1624
Email: info@urbanenergy.org.uk
Website: http://www.urbanenergy.org.uk/

FiT tariff to kick-start solar boom!

Last week, huge auditing firm PricewaterhouseCoopers (PwC) released an analysis of the Solar PV markets across Europe and particularly the UK. The report claims that the solar panel industry in the UK is on the brink of a bright future with the Feed-in Tariff (FiT) promising a new dawn for Photovoltaic systems.

PwC say that the conditions are such that there could be a tenfold increase in Solar PV installed capacity in ten years, but only if a number of obstacles are overcome. In order to ‘capture' this potential growth, individuals, government and firms must focus on the five big barriers: Consumer awareness, upfront funding, consistency of policy, access to capital and a UK skills shortage.

Once everyone has adapted to the changes, the FiT and other incentives will drive significant future growth while Solar PV will cease to be a ‘cottage industry' in Britain. The encouraging growth forecasts are tempered, however, by the realisation that current installed capacity of Solar PV is miniscule. Only 0.1% of the country's renewable energy is supplied by PV and after ten years of a FiT, the UK is only likely to reach the levels that Germany is at today.

Many people in the UK do not understand that, especially under a feed-in tariff, the UK can provide more than enough sun to justify a solar panel set-up. The payback achievable on solar PV installations in the UK compares favourably with levels known to have stimulated markets in other countries. Gus Schellekens, the sustainability & climate change director at PricewaterhouseCoopers LLP said, "The focus on PV is timely with recently published roadmap documents outlining the future global potential for PV technologies. While its use in the UK is small today, PV has a promising future if supported by strong government policy that sustains early deployments and supports the technology's transition to cost competitiveness."

One of the main points of the PwC analysis is that incentives and policy must be maintained to ensure consistency and confidence in future returns. Regularly changing incentives and uncertainty could lead to investors holding back causing lower growth. Currently, the UK government is considering a change to the Feed-in Tariff system, promising to establish a full system of feed-in tariffs for electricity. No greater detail has been released at a time when increased clarity would promote economic growth in this area.

URBAN ENERGY

Our mission: “To provide and install, sustainable, world class, clean energy products with the highest level of service and care."

Urban Energy is an innovative organisation specialising in the financing, design and installation of economic and environmentally sound solar powered energy systems for commercial property (private and public) and domestic dwellings. Our expertise in the field of Government sponsored funding programmes and solar power products will provide individuals and organisations with an excellent opportunity to overcome capital cost barriers, save money on energy bills, increase profit margins, increase the value of their property and reduce their carbon footprint.

Urban Energy employ the very best engineers in this field, all of which are fully qualified, MCS certified and Government approved to carry out this task, complying with strict guidelines and are members of the Solar Trade Association.

For further information about Urban Energy products and services:

Call: 0800 232 1624

Email: info@urbanenergy.org.uk

Website: http://www.urbanenergy.org.uk/