If you’re a regular reader, you know that we’re crazy about everything solar and green. Our particular focus is usually community energy, but there are many alternatives out there that are equally legitimate and important to the equation of building a more environmentally minded society and a healthier world for all of us to live in. One of those elements is smaller-scale, rooftop solar energy, which in the UK has crossed the one million installations mark in 2015.
This week we’re going to take a look at it and try to answer the question “What’s the story with rooftop solar in the UK?”
What are the costs?
Usually, the first question anyone thinking of installing solar on their home asks is: “is it expensive?” For the past eight years approximately the price of solar panels has been dropping consistently. The drop in price has largely been keyed by a drop in the cost of polysilicon, the material from which solar photovoltaic panels are made. Back in 2007, due to a shortage of this material, polysilicon prices jumped to $400 per kg, but that rate was short lived and between 2008 and 2011 prices fell approximately 94%, to $25 per kg. This translated into the price per watt of solar photovoltaic plates falling from $3.25 per watt to $0.72 per watt. In the domestic, commercial market in the UK this rapid decrease in cost has made residential rooftop solar a lot cheaper over a very short period of time: five years ago it cost an average of £15,000 to install a rooftop solar array, and today the price is less than half of that, around £7,000.
According to figures from numerous installers and solar energy associations and advocacy groups, the cost of purchasing and installing a 4kW rooftop array can be between £6,000 and £8,000. An array of this size will output in the region of 3,500 kilowatt hours of electricity a year, depending on latitude (solar arrays in the south of the country can produce 3,800kWh, whereas further north the figure will be closer to 3,200kWh). With the average energy consumption of a typical UK household being around 4,500 kilowatt hours a year, a 4kW solar array can supply around 75% of the electricity needed. Of course not all that electricity will actually be used in the home, as household demand never matches up exactly with output. Some of the electricity that is produced will be sold back onto the grid, benefitting from the Feed in Tariff system.
What is the regulatory framework like?
If you’ve been following our blog and our social channels you’ll probably be familiar with the government’s FIT cuts as we’ve discussed them quite a bit over the last few months. Unfortunately, the cuts don’t only affect larger solar schemes like those typically seen in community energy, they also apply to smaller systems, such as those placed on rooftops. Under the old FIT system, electricity generated by arrays rated at between 0 and 4kW of power was subsidised at 12.47p per kilowatt hour, the rate enjoyed by most residential rooftop solar, but the government’s revision of the FIT has cut subsidies by 65%, to a rate of 4.39p per kWh. These cuts have significantly reduced how much money owners can receive under the Export Tariff (electricity that is sold onto the grid) and the Generation Tariff (money paid for self-consumption of renewable electricity). Currently, a typical 4kW rooftop solar array will generate earnings of around £400 a year from savings to electrical bills, electricity sold to the grid under the export tariff, and electricity used in the home under the generation tariff. With installation costs at an average of seven-thousand pounds it takes 17.5 years to pay off the array, after which the owner can profit from the 2.5 years left of subsidies from FIT, which runs for a total of 20 years. With these figures, a 4kW rooftop solar array would generate a net return of £1000 over its subsidized lifetime or what is the same, 14.28%. The good thing is that solar panels expected lifetime extends beyond the 20 years in which they are FIT-subsidized, as they can continue to produce energy for up to 50 years. Considering downwards trends in household electricity consumption and improvements in energy efficiency, it’s not inconceivable that over the next decade or two we are able to reach levels at which we can power our homes 100% from rooftop solar.
What are the main advantages?
As the figures we mentioned above show, the average rooftop solar array won’t earn you significant returns although it will put you in the green over its lifespan respective to its cost. But even more importantly, it will contribute to reducing carbon emissions. The average rooftop array we’ve referenced in this piece will produce savings of around 1.7 tonnes of CO2 a year. That’s 34 tonnes of CO2 over 20 years, and over the estimated 50 year lifespan of the photovoltaic panels it could represent as much as 85 tonnes less of CO2 being output into the atmosphere. Additionally, installing rooftop solar can create sort of a snowball effect: the more people that install solar panels, the more others that don’t have them open up to the technology and become interested in doing so too. The best thing any of us can do for the environment is adopt a more environmentally friendly lifestyle, but the second best thing we can do is work to have a positive influence on those around us so they do the same. Aside from the initial investment required, which has been dropping consistently for years now and is predicted to continue to do so, rooftop solar has few if any downsides. It is unobtrusive, efficient, self-cleaning (one of the upsides of living in such a rainy country!), noiseless, and most importantly, good for the environment. It’s easy to reduce everything to cold calculations of numbers and figures, but the environmental imperative arguably more important than earning money.