The state of domestic solar in the UK

3 March 2014 | CustomSolar

Custom Solar Managing Director-Matthew Brailsford (2)

By Matthew Brailsford
Managing Director at Custom Solar

If you pick up a magazine or google ‘Solar PV’ in the UK you will find many confusing and scary statistics. You will also find many articles that focus on the negatives of the market since 2011. This is because a lot of the knowledge and opinions around this market are outdated and misinformed.

Solar PV in the UK is a market that is growing but still in its infancy and because of this it is not without its struggles, but then again, anything worth having is worth fighting for.  The biggest waves in Solar PV happened back in 2011 when the Feed in Tariff (FiT) was dramatically cut from 43p to 21p at very short notice (short enough that is was deemed illegal). In my opinion this caused so much shock because of the jarring nature in which the government went about the change, not because this made solar investments nonviable. Sadly though, it did have an immediate effect on some larger scale projects that were taken off the table to be re-assessed.

Speaking for the staff at Custom Solar I can admit that we panicked much like everyone else, however after the dust settled and we evaluated the situation we realised that not only was solar PV still a terrific investment, but it had also been set on a sustainable course for the future.

The biggest misconception around the domestic market is that the reduced FiT rate has reduced the value and worth of new systems, however the people who make these comparisons fail to address one salient piece of information: the facts.

Check out the table below, yes you have read that breakdown correctly, the return on investment is virtually identical on each tariff rate. The only real difference being that the initial amount that a household needs to raise is considerably less and with finance options now available for solar PV it is more affordable than ever before. These facts highlight that solar PV is still an absolute no-brainer decision. With electricity prices on the rise, poor interest rates at the banks and many families in fuel poverty, something needs to be done.

*These figures are based on a South facing 4KW system in Sheffield.

Year

2011

2013

Energy generated (KW/h)

3568 KW/h

3568 KW/h

Feed in Tariff rate

43.3p

15.44p

Income from FIT

£1544.94

£550.90

Export Tariff rate

3.1p

4.64

Value of exported energy

£55.30

£83.78

Electricity purchase price (Nationwide average)

12p

13p

Electricity saving

£214.08

£239.06

Total system worth

£1814.32

873.74

System price

(Nationwide average)

£12-15K

£6–8K

Return on Investment

12-15%

11-14.5%

 

The deployment of domestic PV has also risen from 608,000 kW at the end of January 2012 to 1,199,815 kW at the beginning of June 2013, which only goes to prove the industry’s continued growth, drive and commitment towards a renewable technology future.

All this being said though the domestic solar PV marketplace can still prove to be a daunting area for customers to dip their toes into, with so many companies, products and prices available it can be hard to know where to turn.

As a company, Custom Solar has dealt with people from all walks of life and varying levels of understanding around the industry but they all have one thing in common. Research. I’ve always applauded this attitude and support it fully.

For customers to make the right choice they need to look further than just the panels and start to dig a little deeper into the companies that will install and maintain them. If I was going to spend between £6-8k of my hard earned money I’d want to make sure I was dealing with a reputable, well established company and my first question would be, “can I visit you at your offices?” This may sound simple but sitting down with a company’s designer or electrician, who can answer any question they have, will set a customer’s mind at ease.

This process could also save a vast amount of internet research. At a glance solar companies should hold qualifications/accreditation’s in the Microgeneration Certification Scheme (MCS), Renewable Energy Consumer Code (RECC) and a competent person’s scheme such as NAPIT or the NICEIC in order to comply with Part P electrical guidelines. On top of these companies should have relevant liability insurance and warranties to cover their work.

Currently a lot is being said about the European Commission and the temporary anti-dumping levies it has imposed on Chinese solar panel imports, this will initially average out at 11.8% however it could rise to 47.6% if no compromise can be reached with China. This uncertainty around price casts a dark shadow over the pricing and procurement of future installations and doesn’t help consumer confidence. If these levies go ahead though it will be an attempt to put solar panel prices on a level playing field and this could increase the cost of a domestic installation.

As a solar sales and installation company Custom Solar faces the same challenges day to day, the biggest one being the re-education of customers. What I mean by this is that the majority of customers we engage with have at least one or two misconceptions around the market, whether this is old information or unfounded rumours from a couple of years ago and although we accept this as part of the process now, I still feel as company director that the message ‘solar is still the best investment you could make’, should be conveyed from a higher level and shouted from the rooftops.

In addition to this I feel that all the money that has been poured into the green deal hasn’t exactly made that route into the market crystal clear (quite the opposite actually) and potentially some of that budget would have been more wisely spent on general information marketing as opposed to all this chatter about GW and decarb targets, because after all, does the average domestic customer really get into a solar investment to drive towards the 2020 targets or to protect their finances and family by generating their own electricity?

The future of the domestic market in my opinion will be an interesting one, the biggest question being ‘will the majority of people continue to shop on price alone, or will the quality of an established company with warranties, insurance and selected stock shine through in the end?’

As a company we subscribe to all of the schemes that police the industry and we will continue to do this, I would however hope that more of the smaller companies that operate will be held to the same standards as many of us regarding audits, health & safety and customer interaction. If the market is reduced to the ‘cheapest person gets the job’, regardless of quality, then you will see larger more established companies concentrating on their commercial portfolio and letting the one man bands scrap for the domestic market. The only way to keep the standards up and the proven companies interested is if the governing bodies of solar rule with an iron fist and take the rule-breakers to task.

My views on the coming years are that we may have to weather a few storms and go through a few changes but the core make-up of this industry and its customers are like-minded people who are relentless in their goal to reduce carbon, save money and to be honest, save the planet.

There are alternatives to renewable energy but I think as a country we have all had enough of burning fossil fuels. As a nation we need take responsibility for our own energy consumption and we have the technology and expertise to implement this. So we sit here now as masters of our own destiny, do we save the planet one household roof at a time or do we just continue as things are going and hope fossil fuels are still around when our children are grown up? The future of solar PV in the UK looks set to be a bright one. We’ve made our choice, I hope you join us.

 

This article originally appeared in Solar Business Focus UK – Issue 8