Monday, March 01, 2010

Does PV - solar electricity - work in the UK?

The Government's Feed-in-Tariff (FIT) programme - energy cashback - will soon give subsidies for householders installing renewable energy in their homes.

George Monbiot told me last night he's going to publish tomorrow a critique of them (it's online now, here), arguing that when subsidising solar electricity (photovoltaic/PV) panels they are a waste of money and a rip-off to taxpayers.

As I have in the past campaigned for FITs, I was initially taken aback. But then I recalled I'd looked into the cost-effectiveness of PV systems before and agreed.

The truth is they do have very long cash payback times, even with a subsidy, which is an artificial way of reducing payback and doesn't reduce its actual real-world cost.

The question then arises - shouldn't we spend the money on other technologies which can have the same impact on reducing carbon emissions but more cost-effectively? George quotes the same McKinsey report comparison table Ive used before and which is in the Stern Report, to indicate which technologies do offer value for money.

What's the evidence for saying they are a waste of money?

Firstly: Here are the results of a 2006 study from Bartlett School of Graduate Studies, University College London:

This paper compared two solar systems, an actual building integrated, photovoltaic roof (BIPV) and a notional solar thermal system for a residential block in London, UK.

The carbon payback for the solar thermal system is 2 years, the BIPV system has a carbon payback of 6 years.

Simple economic payback times for both systems are more than 50 years. Calculations considering the current UK energy price increase (10%/yr), reduce the economic payback time for the PV roof to under 30 years.

The costs to reduce overall carbon dioxide emissions using a BIPV roof are £196/tonne CO2, solar thermal individual systems at £65/tonne CO2 and community solar thermal at £38/tonne CO2.

Secondly: A BRE / DTI 2006 UK Photovoltaic Domestic Field Trail (PV DFT) made recommendations on installing PV but did not even look at payback.

Thirdly: Here's something I wrote in my forthcoming book on environmental refurbishment that was taken out by an editor:

Photovoltaics would not need the high level of financial support that the technology clearly does if there wasn’t a problem with generating enough power in extreme latitudes to justify their installation.

Many people have had their enthusiasm for photovoltaics curbed when they find out exactly how much power they can expect to generate for their cash. Therefore it is important to be quite clear on this: you are unlikely to generate more than a fraction of what you need and if you’re looking for quick paybacks, forget it.

The best way to demonstrate this is through a worked example.

Lesson 1:
Solar panel manufacturers quote figures for the “peak power” and “installed capacity” of their products. According to industry standards these are the amounts of electrical output in watts that they would generate if one kilowatt per square metre of the sun’s energy were to fall on them. But how close is this to the amount of sunshine at your location? These figures can be found out from the same source on insolation given in the section on solar water heating. For most of the latitudes that cover England and Wales, the summer insolation is a fraction of that figure. Even Europe’s sunniest place, Limassol in Cyprus, only gets 325 W per square metre. London gets 198 and Edinburgh 172 in July. In December, the figures are 96, 22 and 13 respectively. So in the winter, it’s a lot less -- and that’s when you need more power because the lights will be on for longer.

On average, Edinburgh receives just 9% of the solar energy required by the panel to generate what it says it will on the box.

Lesson 2: Suppose you installed 30m2 of panels that were quoted by the manufacturer as having a peak power or installed capacity of 5.7kWp. Suppose they were installed in London, which has an average insolation figure over the year of 109W/m2. In that case you wouldn’t get 5.7kW averaged over the year, but 0.109 x 5.7kW = 621W. However that is the average figure.

In darkest December they were generating just 125W, or enough to power 10 low energy light bulbs. In fact it might be even less than this, because of shading, downtime and other system inefficiencies.

Lesson 3: How much would this cost and what would your payback be? Here are some figures from 2004 for an installation on the roof of The Insolvency Service, in Bloomsbury London. (There aren’t that many case studies where the figures are all available -- this one comes from a UK government report - Large-Scale Building Integrated Photovoltaic Field Trial: URN Number 07/1316, BERR, 2007:

Size  Annual Output Project Cost Cost per peak W  Cost per kWh Payback time

kWp MWh/year £ £/Wp p/kWh (years)

25.4 11.8 318,760 12.6 108.2 237

237 years payback? This is a good example of how not to do it - and perhaps ironic given the purpose of the institution (if we did this we would go bankrupt).

The best performance figures in the report come from a water park in the Cotswolds.

These are from 300 building-integrated monocrystalline modules rated at 85W on a 150m2 sloping roof, with a yield of 51kWp. The system cost €397,500 in 2003 and the following year generated 44.3MWh. The figures in the report are:

51.0 42.8 2 65,000 5.2 24 .8 54

54 years is still a long time to wait to get your money back, especially when the modules only came with a 20 year warranty from BP. And 24.8p per kWh is still twice the current average electricity price.

(These examples illustrate how to work out PV systems’ cost effectiveness. To work out how much carbon emissions they save, simply multiply the megawatt-hours by the carbon dioxide emissions figure given for fossil fuel electricity, which presumably the panels will displace, given on page x - 550 kg/MWh.)

Lesson 4: Although the figures from the field trials report a mean/peak power ratio of over 7%, equivalent to an annual yield of over 610kWh/kWp, if we accept a grid-purchased electricity price of £0.114/kWh (the 2008 UK average), and require a 5 year payback period, the break-even cost of a PV system - the total installation cost per peak watt - is £0.35/Wp.

But the UK Energy Saving Trust, in its brochure on solar electricity published in 2007, quotes installation prices for domestic rooftop PV of £5–£7.50/Wp. This seems a bit steep, but: it is 14–20 times higher than the break-even value.

And you’re only generating a fraction of the power you need.


Anonymous said...


Germany has a thriving PV market with similar insolation levels and a comparable FiT rate. Most of the installations are in the sunnier southern region and it's fair to expect a similar development pattern in the U.K. - See Insolation Map(

You shouldn't use statistics from 4 years ago. The pace of technology change demands that you use fresh statistics. Here's a decent site. ( The German version of the page has november data and it should be updated shortly with the december numbers. Take a look at how the system prices plummeted in 2009. How low do they need to go before people start taking this technology seriously? 2500 Euro/kWp? 2000 Euro/kWp? They should reach these price points over the next few years.

Your 5 year payback example is too agressive. The FiT structure in Germany is designed to produce an 8% Internal rate of return. They have 9 Gigawatts of PV installed so the system definately works.

Low Carbon Kid said...

I used UK figures based on actual monitored systems. They may be four years old but there is a real paucity of monitored data - in many areas of renewables and building performance. It appears that your link is not to independently monitored system data but to industry performance in Germany. Besides, four years is not so long, and PVs haven't got that much more efficient in the meantime. The simple fact is that there is not enough sunshine in the UK, unless PV becomes much much more efficient at converting sunshine to electricity in the middle of winter.

Anonymous said...


I'm only talking about price. Four years ago is a very long time ago in terms of price data. You wouldn't use prices of flatscreens from 4 years ago to compare current TVs? PV is roughly similar.

The technology change has been significant at the leading edge but these developments are only starting to filter into the market. Efficiency won't change your kWh/kWp performance so it's irrelevant.

Craig Morris said...

My (lengthy) comments here:

Andrew Smith said...

Some more thoughts on the discussion about PV and British and German feed-in tariffs

merrick said...

So here's my dilemma.

I agree with what you and Monbiot say about PV being an absurdly expensive way to make carbon cuts this far from the equator. I agree that we should be subsidising the cheaper options.

But now that FiTs exist, what's the ethics of taking it up?

Would refusing to fit FiT-subsidised PV make the government more likely to fund the more effective technologies? Or would it just leave us on the fossil based grid with no PV?

This isn't like the government paying us to install coal fired systems or something, it's something that will pay back its carbon debt fairly quickly and reduce a household's emissions. But it is supporting a system that shouldn't exist.

I genuinely have no set position on this and am keen to hear what well-informed others think.


PS. Only just found your blog whilst searching on the PV thing. Like it a lot and have added you to my blogroll.

Low Carbon Kid said...

The dilemma is a moral one about social equity. The grants are financed by an increase on everyone's fuel bills. So poor people's bills will go up to finance richer people's home improvements.

It's more cost-effective to buy green electricity on a tarrif (eg Good Energy) and invest in energy efficiency and solar water heating. See my book for more details.

Morgan Spencer said...

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Anonymous said...

I'm not rich, simply retired with enough to invest in a 4Kw pv system. Cost £10.5k. Being retired gives me flexibility to adjust my energy use around the bluetooth display in kitchen telling me how much is being generated. I use microwave to heat water for drinks, to wash and shave.
Today 6 Oct sunny spells, WEST FACING array, UK East Anglia I did a 40c wash, part tumble dried, ironed previous wash, hoovered house. Use from grid: 100 watts. Generation by 5pm 8050 watts therefore exported to grid 7950 watts. I could go on but hope I've made my points. I expect to get return on investment(ROI) in 7 to 8 years, and to generate at least 2,500 Kw per annum.

David said...

That's impressive, Bill. Can I ask the size of the array. A photo would be very nice too!

Anonymous said...

Hi David
My array is a 16 panel Samsung 247W. West facing bungalow roof, but gets sun from around 10.30 am even October. Sun set today at 6.25 by which time 10.52Kw output, of which 10.42 went to grid. Yesterday cloudy all day but still 4.7Kw output.
I have photos but can't see means for loading - any suggestions?

Anonymous said...

Hi David

I have put a couple of installation images on this website

Hope you or others access them OK


solar pv panels cardiff said...

i do think there has been a big increase from the UK market, lots of church groups, schools and non profit organisations can see the long term benefits to fund raising now to pay their long term bills for energy.

I think it would be unfair to suggest that only the already rich can benefit from solar panels in the UK.

Anonymous said...

just installed my own after much thought. this came after roof insul top up to 270 and cavity wall insul was put in.
main argument for was that the energy return on energy invested was between 2 and 4, ie we get the energy back, and we actually save carbon.
I now don't expect my meter to move much as I expect to use as much as I produce.
Govt continues to subsidise nuclear at my expense (through tax), but I am using my own money for this.
I'm already a Good Energy customer (paying 14.4p/unit) and I have now become one of their generators.
I can't see why anybody shouldn't apply under the Green Deal to set up an appropriate investment with an ESCO to have PV installed free of charge and paid back over the six/seven years mine will.
As for working at the lower end of the carbon cost abatement curve, I'm now with Dave Mackay (Sustainable energy- Without the hot air) - we've got to get going with this...

Anonymous said...

2y 12/03/2010 comments were spot on eh? Damn I'm good. You should see what I'm predicting these days - it's shiny.

I read your REA article today talking about renewable heat and how we should support it. I disagree with your point. With PV you make electricity which is a high quality energy source. You can power a heat pump with a COP of 2.5+ which allows you to generate heat more cheaply that direct solar heat. Cheaper cheaper is good but the fact that you're storing a product (hot water, hot air) is also very good because you're provided an easy way to manage your on-site power production.

David Thorpe said...

Sure, but you wouldn't use that heat to heat your water, which is what you use solar water heating for. You would use it to need space. You would not use a ground source or air source heat pump for hot water heating. The COP would be too low.

It's not either/or, but both and for solar PV and solar water heating. However if you have a limited budget and a choice, solar water heating presents better value for money because it's cheaper to install assuming you already have an immersion tank.