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I wish to make nine points in my response to George Monbiot’s latest round in our disagreement about the importance of solar photovoltaics (PV) and the UK government’s upcoming feed-in tariffs.

1. Monbiot argues that “either solar photovoltaic (PV) power in the United Kingdom is, as (Leggett) claims, a cheap, efficient technology, or it isn’t. If it is, why should we be subsidising it to the tune of 41p per kilowatt hour? If it needs this subsidy, it is neither cheap nor efficient. If it doesn’t need it, the feed-in tariffs are even more of a swindle than I thought.”

This view takes a snapshot in time that is a flawed basis for analysis because it ignores both the past and the future, in terms of cost, plus the strategic context of the discussion. I don’t claim PV is “cheap” today – I never have. PV is on a descending cost trajectory because economies of scale are at work in both manufacturing and installation, and costs and prices of conventional electricity are rising fast. The feed-in tariff is a market-building mechanism. It is designed to create sufficient demand for PV systems to trigger two benefits: first, falling cost and price of solar electricity, and second, growth of a proper UK-based solar PV industry that can compete with the fast-growing industries in Germany, China, the US, Japan and many other countries. More than 40 governments now have feed-in tariffs, and it is clear that many people believe them to be the best way to make grow renewables markets fast.

2. Monbiot bets me £100 that my prediction that solar PV electricity in homes will be no more pricey in 2013 than conventional electricity will be wrong.

I accept Monbiot’s bet. But I have a proviso: that the winner donates the £100 to the charity SolarAid, set up by my company, for the training and equipping of solar PV lighting entrepreneurs in Africa.

This seems appropriate because of another sad aspect of Monbiot’s assault on PV. He does not mention the strategic importance of providing channels of distribution and credit for mobilising solar PV in the developing world, where solar PV electricity is already economic in competition with kerosene and other alternatives. As even the World Bank has admitted, solar PV is a better bet than conventional power plants for the hundreds of millions of developing-world households currently without electricity.

If I lose the bet on timing of UK grid parity, it would only be by a few years at most, and by 2013 I am confident that people will be able to see the writing on the wall with respect to grid parity. And herein lies my return bet with Monbiot. I bet that if we are near or at grid parity by 2013, that we won’t see a column of his admitting to how wrong he was. If he does, I’d gladly donate another £100 to SolarAid.

3. Monbiot suggests that if I “really believed” my sales pitch, I would be calling for the feed-in tariff for new installations to be scrapped in 2013, as it would then be redundant: “He can’t have it both ways: defending the tariff while suggesting that the tariff won’t be necessary.”

I have never suggested that the “tariff won’t be necessary.” The government does not share my view of when grid parity will be delivered, but nor do they believe as Monbiot appears to that new industries and new installer capacity can just be turned on overnight.

By 2013, just three short years from now, the UK will still be endeavouring to build a domestic PV industry that can compete globally. To do that we will need a strong domestic market. To build that we will need a continuing market-enablement regime. The feed-in tariffs can and will be lower by then, but we will still need them. Otherwise, with a low-growth domestic market in an explosively growing global market, we will be importing almost all the solar technology we useand we will have further undermined our chances of energy independence down the track.

4. Monbiot asserts: “Every pound spent on PV is a pound not spent on a more effective technology.”

This is another use of the flawed snapshot argument devoid of strategic considerations. If we were to use only the current price of energy technologies as a yardstick, and discount all trends and strategic considerations, we would allocate all our money to energy efficiency, where we get the quickest paybacks and carbon “bang for the buck.” But this not an either-or: we can’t solve all our energy problems with energy efficiency. We will need plenty of new generation to replace aging coal and nuclear plants, and this will have to mean a range of generation by renewables, alongside as much gas as Vladimir Putin and others overseas will allow us. We would be crazy just to go for the technologies that happen to be the cheapest in March 2010, and it is extraordinary that an advocate of expensive nuclear like Monbiot can argue this.

5. Monbiot says of the German feed-in tariff: “The realisation in Germany, after 10 years of minimal returns, that they have been getting shockingly bad value for money from their scheme coincides with the launching of the same fiasco in the UK”.

It is untrue to suggest that the returns are minimal. Consider just taxation. In 2008, the German government gained almost €3bn from the direct and indirect taxation of German solar power companies and their employees. In the same year, feed-in tariff investments amounted to about €2bn.

6. Monbiot questions the jobs the German feed-in tariff has created. He says: “Leggett goes on to claim, again without attribution, that the Germans have “created over 50,000 jobs in solar PV alone.”

The 50,000 German employees are counted by the Federal Solar Industry Association. Monbiot’s questioning of even this statistic introduces another relevant issue. I have invited him in to Solarcentury several times to discuss the detail of our story and have a go at calibrating numbers ahead of any epistolary exchanges. I have had no success. He seems to prefer unrooted conflict from afar.

7. Monbiot also questions the location of jobs created. He says: “The electricity users who have to pay for the tariff would be rather put out to discover that the jobs the government says it will create are actually on the other side of the world.”

How many mistakes can you make in one article? The Federal Solar Industry Association count over 100 factories in Germany in the industry built to date by the feed-in tariffs. Then there are all the installer companies.

Certainly modules are also imported from China and Japan as well. The global PV market is one of the fastest growing markets in the world (87% in 2008). That is why UK plc needs to be a part of it.

Feed-in tariffs in the UK will lead to many jobs in the UK. Solar companies estimate that around 100,000 new jobs could be created in the UK by 2020. And they will be skilled and fulfilling jobs.

8. Monbiot persists with the argument from his first article: that the British poor will subsidise the solar roofs of the middle class. He says: “Their bills will rise just like everyone else’s to pay for a scheme which will mostly benefit the middle classes. This is why it is deeply regressive.”

First, it is necessary to be clear about the numbers and the likely impact on average household bills as a result of this scheme. The average yearly cost of the feed-in tariff scheme to household levy payers is projected to be £8.50 per year to 2030. The average annual household levy in 2013 when tariff rates are all up for review is likely to be £3. And those are the costs for all technologies not just solar PV. So the question is whether an average household levy of just £8.50 per year makes the feed-in tariff scheme regressive or not? Furthermore, the government has already committed to make the scheme revenue natural by offering loans whereby households can borrow the capital cost of energy efficiency and renewable technologies and repay them over time using the money saved as a result of installation.

And if PV was so regressive, how come housing associations are so keen on PV as a tool for addressing fuel poverty?

9. Lastly, Monbiot accuses me of ignoring a “killer fact”. He says: “Feed-in tariffs cannot reduce our carbon emissions by 1g while the UK remains within the European emissions trading scheme (ETS).

Monbiot and I might find things to agree on, when it comes to scope for nonsense in the European emission trading scheme, as it stands. But climate policymaking requires many tools in the toolkit, and there is no reason to throw feed-in tariffs out just because politicians have historically granted heavy industry emissions allocations that are too high to deliver an effective carbon price. Monbiot’s “killer fact” taken to its logical conclusion would mean no support for any low or zero carbon technology outside the EU ETS.

Original Source: The Guardian

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George Monbiot’s attack on solar energy and the government’s “cash-back” solar photovoltaic (PV) market-building scheme paints a distorted picture of the industry I work in, and government policy towards it (Are we really going to let ourselves be duped into this solar panel rip-off?, 2 March).

First, Monbiot gets the workability of solar wrong. He says: “The amount of power PV panels produce at this latitude is risible, [and] they also produce it at the wrong time.” Those who buy panels, therefore, will own a mere “fashion accessory”. The companies who manufacture solar PV in the UK have shown that putting solar panels on all available building surfaces would generate more electricity in a year, under typical cloudy British skies, than the entire electricity consumption of our energy-profligate nation. Some fashion accessory.

Of course, just a fraction of that area of buildings would suffice because we would want to mix and match renewable technologies – large and small, onshore and offshore – so matching loads and compensating for the fact that solar generates by day and not by night.

Second, Monbiot says the government’s scheme targets money where economies of scale are “impossible” – an incorrect assumption because solar electricity costs will inevitably fall to the point, within just a few years, where they are cheaper than any form of fossil fuel and nuclear electricity. Systemic economies of scale in solar manufacturing and installation techniques are causing rapid reductions in solar PV costs globally, just as Ofgem and others worry so loudly about the inevitable rise of traditional electricity costs.

Third, Monbiot gets the precedent for the British government’s solar “cash-back” scheme – the German feed-in tariff – upside down. He says the “German government decided to reduce sharply the tariff it pays for solar PV, on the grounds that it is a waste of money”.

But all feed-in tariffs are supposed to decline, and indeed reduce to zero within some years – that is the whole point. They are not like the market-building schemes for the nuclear technologies that Monbiot advocates, where subsidies – open and hidden – are needed for decades. Most Germans are rightly proud of their feed-in tariff regime. They have, after all, created over 50,000 jobs in solar PV alone.

Fourth, Monbiot has it wrong about who pays the cash back. “The government is about to shift £8.6bn from the poor to the middle classes,” he says. But the number is not the cost to “the poor”. It’s not even the cost to all electricity consumers over the next two decades. The cumulative cost to all consumers – including all non-domestic industrial, public sector, and commercial users and covering all technologies in the scheme – is £6.7bn, and is spread over 20 years.

The average household levy in 2013, when tariff rates are all up for review, is likely to be less than £3. This is far less than the average saving from the government’s various domestic energy efficiency measures over the same period. So there is no net subsidy. The levy is not “regressive” at all.

Stuart Lovatt from Heat my Home would like to add, “we agree with George Monbiot on many of his views and opinion, on this occasion he fails to grasp the concept and longer term strategy of pv solar panels and more importantly the feed in tariff scheme, aslo known as the Clean Energy Cash Back Scheme.”

Original Source: The Guardian

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Plans to encourage householders to make their homes much warmer and cheaper to run have been announced by ministers. The scheme, which would see loans remain attached to the house where insulation, and solar panels, aims to overcome the financial barriers and upfront costs people face when trying make their homes greener.

Consumers will be offered long-term loans to install insulation, solar panels or other green technology, which they can repay through energy bills. With the expense of green technology and people moving house on average every nine to 12 years, householders may not have a long enough period for paying back the loan before they move to ensure they save more on their bills than the cost of the repayments.

The government wants to save 29% of carbon emissions from UK homes by 2020.

Energy Secretary Ed Miliband said the scheme would enhance the value of a property by making its energy costs “significantly lower”.

The government says its plans will allow seven million British households to benefit from upgrades and create up to 65,000 jobs in the green homes industry.

Ministers say upgrades such as solid wall insulation can reduce energy bills by £380 a year.
Some 500 homes in Birmingham, Sunderland, the London borough of Sutton and Stroud, in Gloucestershire, have already tested a £4m pilot for the Pay As You Save scheme.

Mr Miliband says: “If you’re potentially buying the house, what will you find?

“You’ll find that the energy bills are significantly lower so, say, you’ll be having a few hundred pounds off your energy bills and offsetting that you’ll have a couple of hundred pounds in payments.

“So you’ll think, well I’m better off, actually, because this house has significantly lower energy bills, although it’s got this repayment built into it.”

Original Source: The BBC

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The UK’s offshore oil and gas fields could still be delivering 1.5m barrels a day by 2020, enough to satisfy 35% of UK energy demand, according to industry trade body Oil & Gas UK – but only if high fuel prices and tax breaks combine to make viable a growing backlog of exploration and development projects in the North Sea.

Without renewed investment, production from already mature fields, currently meeting about two-thirds of Britain’s energy needs, will drop to 0.5m barrels a day by the end of the decade, representing only 11% of energy demand.

Earlier this month Ofgem published its strongest warning to date that Britain was heading for an energy crisis. “For the next two to three years with gas supplies and power station availability, we are in a plentiful position,” Ofgem chief executive Alistair Buchanan said. “The problem is the speed at which it deteriorates. To wait a few more years [without doing anything] could cause us trouble. We would get down to historically low levels of margins of plant, to when you are starting to ask if you have enough power stations.”

Having surveyed 70 companies, Oil & Gas UK believes falling investment during the past four years has been a major factor driving down oil and gas production levels. Last year production fell 6% to 2.48m barrels.

The number of development and exploration wells drilled in 2009 reduced by 22% and 40% respectively, the lobby group found. Meanwhile capital expenditure has declined by 20% in the last three years. This year, however, could see a modest recovery Oil & Gas UK forecast, bringing investment back above £5bn.

In recent months the industry has identified up to 11bn barrels of oil and gas in new and existing projects, a sharp rise on previously years. It takes UK offshore reserves close to 25bn. But the cost of extracting the newly identified deposits, many of them located in deep water in the central North Sea or to the west of Shetland, is estimated at £60bn. Production costs at new sites is estimated to be on average 20% higher than for existing projects.

Speaking as Oil & Gas UK published its annual forecasts for offshore exploration, chief executive Malcolm Webb said: “Securing all the investments identified by our survey will demand action from industry to reduce costs and improve efficiency and from government to lower production taxes and lighten the UK and EU regulatory burden.”

Recent years have already seen the government grant substantial production tax breaks to help costly projects in technically challenging deep-water fields.

“The government has taken several welcome steps over the last eighteen months in reducing the rate of tax on various types of new fields; we now need to work together to extend that process to encompass other new and existing fields and positively encourage investment in this vital UK energy industry.”

Original Source: The Guardian

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Solar panels have always been a symbol of the environmental movement in previous years, but more recently solar technology has become a symbol of energy efficiency and conservation instead.

Stuart Lovatt from Heat my Home explains, “Since I started in the solar panel industry in 2004, the only people to install this technology were die hard green people. Nobody bought them for energy reasons because domestic energy was cheap and plentiful with payback  always the deciding factor for most people then.”

“Roll the clock forward 5 years, and we have seen a huge increase in the number of people installing solar panels to their homes with a change in the reasons why people install. Simply, the world has woken up to the fact that energy in the form of oil and gas has a much larger demand on its finite resources since the industrialisation of China and India.”

On a local level, the UK is especially sensitive to energy price rises because:

• North Sea resources are dwindling
• Increase reliance on imported energy from unstable political area’s
• Under investment in existing power networks, decommissioning and new power stations needed

Stuart insists, “The golden age of cheap energy is over. The UK public is slowly waking up to this fact, and as Sir Richard Branson, whose business’s are sensitive to the price of energy, has exposed this week, we as a country are not facing facts that an ‘energy crunch’ is coming and our political foresight is short.

“Heat my Home, as a resource for energy efficiency in the home”, Stuart adds, “We have seen enquiries increase by a factor of 10 over the last couple of months. People are coming to us saying they want a permanent way of reducing household energy consumption to reduce bills. We are seeing for the first time, homeowners using solar panels as a longer term investment in their home.”

“This is great news for the environment, and with the governments new Clean Energy Cash Back and Feed In Tariffs scheme starting this April 2010, the number of enquiries turning into actual installations will also increase tenfold too. Currently a survey of existing solar users has shown that 86% installed for energy reasons.”

Stuart with 6 years experience in the solar industry, concludes, “This begs the question, when will you be installing solar panels to your home? The government incentives will reduce after 3 years, so it’s best to install sooner rather than later for best returns, but the biggest irony of all this, is, as we progress further down the chronological timeline, the energy costs will increase, as will the cost of manufacturing and installation. Global demand is already pushing up prices and reducing supplies.”

With this in mind, being the first on your street to install solar panels will not only give you pride as our existing customers are reporting, but you installed with the best returns possible and you can smile when your 1980’s level energy bills fall on your door matt.

Heat my Home are promoters of solar panels, evacuated tubes and green energy in the UK.

www.heatmyhome.co.uk