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Rumours of solar PVs death have been greatly exaggerated

Posted by Paul Hutchens on 2 May 2012 at 9:26 am

Like many people, I have noticed the drop in installations of solar PV since the introduction of energy efficiency (EPC) requirements on April 1 this year. With DECC publishing weekly data on the feed-in tariff scheme’s capacity, I am not alone.

It has been suggested in the press and by some in our industry that the recent cuts will kill the industry. Some said a 50 per cent cut to the feed-in tariff (FIT) would kill the industry back in December 2011, but, as I suspected, this did not materialise. Unfortunately the suggestion that the cuts would kill off the industry is what has dominated the press coverage.

So is this why do customers not seem to be placing orders?

The first reason is because customers are confused by the conflicting information that is being peddled about. They may also be fed up with the constant changes and tinkering by the Government.

But, to put the situation in context, the FIT scheme was always meant to be temporary to support a new fledgling industry. It was always designed to be reduced in line with costs.

The fact is the current rate of 21p works. As an industry we need to focus on reassuring the public that solar still provides great returns. The current tariff of 21p/kWh for domestic schemes is producing a sound annual return of up to 10%; thanks to the reduction in PV component prices - which is still guaranteed for 25 years and linked to inflation.

That is equivalent to the return we could provide a year ago when people were queuing up to buy solar PV systems! We just need to ensure that the costs and benefits stay in line going forward.

Secondly customers believe that the EPC requirements will make a solar energy system prohibitive. To put customer’s minds at rest we have now installed quite a few systems following an EPC. This EPC can be organised in days and, in more cases than not, simply comes up with a ‘D’ result following the installation of the solar PV system or a few simple measures. These could be a temperature thermostat on the hot water cylinder, thermostatic valves on the radiators, or loft insulation. Most buildings (domestic and commercial) pass without fuss.

So we need to be positive and extol the huge benefits of PV because we recognise that we have a great technology that has delivered astonishing cost reductions in recent months and years – and will continue to do so.

Photo by Allan Henderson

About the author: Paul Hutchens is founder and director of Eco2Solar, which installs solar systems around the UK.

If you have a question about anything in the above blog, please ask it in the comments section below.

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Comments

3 comments - read them below or add one

Cathy Debenham

Cathy DebenhamComment left on: 25 May 2012 at 8:28 am

@muymalestado: that's good to hear

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muymalestado

muymalestadoComment left on: 24 May 2012 at 10:29 pm

This market does not seem dead, not at all.  The scaffolder who last year did for our PV installation stopped by yesterday while on his way to his fifth job of the day.  He has done two 'normal' scaffolding jobs in 18 months, all other work is PV related, and there seems no sign of that work rate changing.

Whether its Rate of Return, or costs dropping, or availability of savings, or whatever, customers seem still to be buying.

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3coPete

3coPeteComment left on: 2 May 2012 at 1:10 pm

I can confirm that new domestic PV installations receive virtually the same rate of return, c9% pa of the capital expenditure, as I was in December 2009 when my system was installed.  It was a good deal then so it's a good deal now.

 

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