UK Feed-In Tariffs Make Solar Roof Projects a ‘Safe’ Investment

Renting people’s roofs to deploy solar panels could be a safe source of income for Pension funds, under renewable feed-in tariffs set to come into force in April 2010 in the U.K. Jeremy Leggett, the executive director of one of Britain’s largest suppliers of solar photovoltaic energy systems, Solarcentury, certainly thinks so.
Mr Leggett was speaking at an industry conference held in London on Thursday, focussing on the new tariffs that the U.K. government is to introduce next year.

As is already happening on the Continent, the extensive life-span of solar panels and the income from both electricity sales and the long-term feed-in tariff subsidies could make the technology a favourite of pension fund investors. Once the initial loan has been paid off - during their working life - the Solarcentury boss said French householders could get thousands of pounds of income a year from their solar panels.

“This is safer than government bonds - in France, it’s already a pension for those guys. It’s also a hedge against future electricity prices. I’m really bullish about very large demand coming - and elsewhere where there will be multi-MW installations in sunny areas.” said Mr Leggett. Pension funds are moving around Germany already, offering householders rent for their roof space, while in France householders can get low-cost loans for solar systems they can personally use as a pension.

Feed-In Tariffs
The renewable energy industry has suggested that a long-term feed-in tariff of around 42.5p per kWh of power generated should be brought in for photovoltaic systems, with a 7.5p per unit premium for building-integrated systems.

During his presentation to the Renewable Energy Association’s feed-in tariffs conference on Thursday, Mr Leggett said global solar PV costs had halved in the last few months, adding that the technology would be comparable to average grid electricity costs in the UK by 2013 at a household scale and by 2021 on an industrial scale.

With a stable feed-in tariff, he said Britain could catch up with the likes of Germany, which is forecast to reach 2,000MW of installed solar capacity this year compared to 6MW in the UK.
He spoke of his frustration at the perception that solar PV systems don’t work in the UK - revealing his surprise that solar photovoltaic technology does not feature at all in the government’s predictions for energy generation in 2020, as detailed in the Renewable Energy Strategy.

“The government’s own consultants - Element Energy - agree with me, and they are independent consultants,” Mr Leggett said. “They said the opportunities for investment in PV in the non-domestic stock is enormous - over 30GW.”

As the UK seeks to pull itself out of recession, the Solarcentury executive director also pointed to the 20,000 to 40,000 jobs he said could be created in delivering solar power in this country.
“It may seem bizarre to be saying this in 2009, but solar PVs can be the backbone of a sustainable future in 2020,” he said.

Speaking at the same conference, Solar Trade Association chairman Howard Johns also said the feed-in tariffs being introduced for renewable heat - expected to start in 2011 - would also be a “huge” opportunity for solar thermal companies.

“Solar thermal has been unanimously ignored by government policy for 30 years,” he said. “But we are going to go from 120,000 installations to seven million in nine years’ time.”