Report: what next for residential solar following the end of the feed-in-tariff?

Days after solar broke the record for weekly output between June 21 and 28, the Government delivered a blow to the small-scale renewables industry when it announced that in April 2019, their popular feed-in-tariff will end for new applicants.

Friends of the Earth originally praised the scheme as a ‘tremendous opportunity for people across the UK to play their part in the green energy revolution,’ and since its introduction in 2010, the tariff has encouraged a solar boom, with almost a million homes in the UK now featuring solar panels.

Participants receive a set amount for each unit of electricity that they generate, called a ‘generation tariff’. The rates vary depending on the size of the panels, when they were installed or how energy efficient your home is.

One of the most attractive features for homeowners looking to go solar was the so-called ‘export tariff’, which means extra units of electricity that are not used can be sold back to your electricity supplier. Currently, you’ll get 4.85p per unit of electricity.

However, these incentives were cut drastically in 2016, which has meant the number of people installing solar onto their homes has flatlined.

Closing time

RenewableUK, a trade organisation for the renewables industry, has criticised the Government’s handling of the closure.

‘Confirmation that there will be no replacement for the Feed-in Tariff is a major blow to small-scale renewables in the UK,’ their executive director Emma Pinchbeck said.

‘Small-scale renewables technologies are a vital part of creating the more local, smart power networks that will be central to the UK’s future energy system. Companies in the sector have helped tens of thousands of homes and businesses to cut their energy costs, and have grown into a thriving industry that exports around the world,’ she added.

It’s easy to see why solar has been so popular with homeowners.  They require virtually no maintenance and are guaranteed under warranty for 25 years, lasting as long as an average roof replacement. Homes with solar panels are easier to sell, and the Energy Saving Trust estimates the average household can make savings of around £150 per year.

The once-significant installation costs have also come down, and a report from Green Business Watch estimates that since 2010, installation costs for solar have been reduced by 67%, on average.

However, it’s now expected that the closing of the feed-in tariff will put an end to the take-up from middle lower-income families. Cornwall Council has said that the Government constantly ‘moving the goalposts’ around renewables will affect its own housing and energy policy, and they will put plans to add solar to their housing schemes on hold.

Johnny Goudy, from Regen South West, which promotes green energy in the region, told BBC Radio Cornwall that the poorest in society will be hit the hardest by the end to feed-in-tariffs.

He said: ‘By reducing the level of support, reducing the financial attractiveness of the scheme, the danger is that it will go back to only the wealthy being able to pay for it.

‘Only the wealthy will get to enjoy the energy transformation and bill reduction. This will hit the poorest people the hardest.’

The California model

Envious glances were cast in the direction of California when earlier this year they announced all new homes in the state will be built with solar panels. The rules come into force in 2020 and are part of the state’s ambitious efforts to cut greenhouse gas emissions, but the dream of something similar being implemented in the UK look more uncertain than ever.

However, a recent report from the Solar Trade Association (STA) has revealed that local authorities are now able to deliver solar farms which do not rely on subsidies.

West Sussex County Council are building a subsidy-free project on a closed landfill site and others are following suit. The STA say top 10 local authorities by investment have collectively invested £80m in solar so far.

The report adds that can councils can make solar work by using planning powers to demand higher standards on new developments, making use of interest-free finance from Government-funded Salix Finance, and putting solar and storage alongside electric vehicle infrastructure.

Barnsley Council created one of the big success stories in recent years after setting up their own low carbon energy company, Energise Barnsley, in 2015. It’s now the largest rooftop solar community energy project in the UK in an area of deprivation and high fuel poverty.

321 homes have benefitted and they believe that these households to date have saved a collective £12,000 off their energy bills.

But could the loss of subsidies mean a more sustainable future for solar? Inspired by the technology seen in Tom Cruise’s sci-fi film Minority Report, Cambridge firm Polysolar has created a transparent alternative to solar panels which they believe could harness the power of the estimated 1 billion windows around the UK.

Hamish Watson, their CEO, believes the end of the feed-in tariff could provide opportunities for innovation.

‘Our biggest problem was Government policy,’ says Hamish.

‘The feed-in tariffs, whilst introducing the public to solar and kicking it off, meant people were only interested in the financial return and the cheapest possible solution. Now the subsidies have come down significantly, we believe is the time to build solar around the building material.’

As the old saying goes, make hay whilst the sun shines, and residential solar panels have helped to generate record levels of electricity during this summer’s heatwave.

Looking ahead and the future looks unclear. On the same day they announced the closure of the tariff, the Government published a Call for Evidence on what financial support, if any, it should provide to small-scale renewables.

They also launched a controversial fracking consultation, and questions about how serious they are about encouraging a ‘green revolution’ in energy remain.