Electricity price surges could boost solar market

Putting the greens back in the green

Rising electricity prices could be good news for the UK's fledgling solar power industry, according to a report from ENF, a solar power broker and market research group.

In the catchily named The New Emerging UK Solar PV Feed-in Tariffs - Transforming the economic case for domestic solar PV systems, ENF identifies recent changes in the UK that have improved conditions for makers of solar power systems. There are two strands to the changes: firstly electricity is getting more expensive, and secondly, it is becoming economically more feasible to invest in solar power systems.

Not only have electricity prices risen substantially in the last year or so, there is also an expectation that prices will continue to rise, ENF says.

ENF reckons more people will be willing to invest in the very expensive solar kit, because there are more ways for them to make a bit of cash back.

UK power companies are required to source a certain proportion of their electricity renewably (this rises to 15 per cent by 2015). ENF notes that more companies are now willing to deal with the complexity of buying their so-called Renewable Obligation Certificates from customers with solar panels, or other forms of renewable power generators.

People can also make a bit of money by selling their excess electricity to the power comapnies. ENF says that four suppliers are now offering "much improved" feed-in tarrifs. This is the price per unit of electricity that a utility or supplier pays for renewable electricity from private generators.

There are still caveats: ENF does not expect the market in the UK to do as well as the German market, and the improvement will not be spectacular.

But Stephen Temple the CTO of ENF, says "A very bleak UK story has been gradually transformed to a more encouraging picture, almost without anyone noticing it."

"The UK has three key challenges," he adds. "The red tape needs to be slashed, there is still some ground to make up on the incentives and the local distribution industry needs better scale economies. Get these things right and a UK installed base of over 1 GW peak of solar energy by 2015 becomes a real possibility."

The report is available to buy from the ENF website here®

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