Could solar power boost business?
PUBLISHED: 06:00 10 February 2010 | UPDATED: 08:02 02 July 2010
Converting sunlight to electricity has long offered families a way to reduce their carbon footprints - and with new feed-in tariffs guaranteeing payment for the power they generate suppliers are seeing a boom in demand.
Converting sunlight to electricity has long offered families a way to reduce their carbon footprints - and with new feed-in tariffs guaranteeing payment for the power they generate suppliers are seeing a boom in demand. SAM WILLIAMS reports.
With electricity bills already at a premium and only likely to rise further, generating energy from sunlight has become increasingly popular with households across Europe.
And when new feed-in tariffs come into force in April the number of families using solar power is expected to quadruple in the UK - and suppliers and fitters in the region are already reporting a surge in trade.
The feed-in tariffs, announced by the government at the start of the month, guarantee a rate of payment per unit of electricity fed back to the grid from a variety of renewable home energy sources.
In the case of photovoltaic cells - solar panels which use sunlight to generate electricity - the rate has been set at 41.3p per kilowatt hour for systems of less than four kilowatts fitted to existing buildings, or 36.1p for those on new homes.
The impact of the tariffs will be to make photovoltaic (PV) systems much more attractive to families.
While typical systems fitted to roofs typically cost £8,000 to £14,000, the government says they could net households up to £900 a year which, on top of £140 savings on electricity bills, means the systems will pay for themselves in less than 10 years.
And many are guaranteed to continue producing electricity for 25 years, meaning for the bulk of their lifespan they will produce free energy and income.
And with grants of up to £2,500 available until April to set up PV systems companies in the region are already seeing a steep increase in demand.
Ed Elliott, sales manager at electrical engineering company Dabbrook, based in Great Yarmouth, said the PV industry was expecting a four-fold increase in sales in 2010, driven by the new tariffs, and said demand was already taking off.
The company, which also designs and builds complex electrical control systems, moved into renewable energy in 1998.
Mr Elliott said: “We have seen at least a four-fold increase in demand in terms of the numbers of inquiries we are dealing with.
“Two or three years ago we used to see fewer than 10 inquiries per week. Now that's 20 to 50 a week, it really is that kind of size increase.
“Some of those inquiries don't come off as a lot of people who inquire are put off by the initial costs. It is an expensive system to install but it does pay for itself in the long term.
“Effectively it's the same as having a savings account offering 7.7pc interest a year, which in today's economy is pretty good, but it is a 25-year investment.
“PV does have a lot of advantages. It is maintenance free, it just sits there and works for 25 years without any problems.”
The company, which supplies and fits PV systems to domestic customers for a 150-mile radius around Great Yarmouth, has also delivered the technology to schools, councils and private sector housing projects nationally.
And Mr Elliott said as demand picked up prices were likely to fall - although not by as much as some had predicted.
“Demand is going to increase and prices will fall accordingly, but PV is a very mature product and it's not going to see a big drop in prices,” he added.
He said parts of Norfolk and Suffolk were also among the best areas in the country for PV because of a high amount of sunlight.
Another company which has secured business as a result of renewed interest in PV is Active Technologies.
The engineering design consultancy, based at the Hethel Engineering Centre, secured a contract with Greenfield Holdings, a company which is supplying PV panels to a major supermarket chain, late last year.
Active, which has experience in car, offshore energy and aerospace industries, will deliver the framework to support the PV cells initially on a 500sq m roof of one store in the south of England, worth £25,000.
But the client has plans to expand that to 37 further stores, which could be worth up to £2m for Active.
And managing director Paul Spinks said he expected PV's importance in the market to grow.
“Without doubt PV is going to be big,” he said. “The client we are working with, a supermarket chain, has committed to getting 5pc of its energy from solar power.
“All corporations looking to reduce their energy use and CO2 emissions by 2020 are going to need a mix of technologies to do that.
“PV becomes viable with feed-in tariffs, and as it rolls out and becomes bigger the cost will come down.
“The sun only shines eight hours a day but it is quite a low-maintenance system.”
But he said banks' unwillingness to lend money at the moment was making it difficult to many businesses to obtain the funding to go ahead with investment in PV.
As well as PV, the feed-in tariffs cover a range of other renewable energy sources, including small wind turbines and hydroelectric systems.
The tariffs also guarantee rates for owners of solar thermal systems, which use the sun to heat water, offsetting electricity or gas use, at 18p per kilowatt hour.
Lee Hunton, partner at gas and plumbing company Hunton and Overton, based in Shipdham, near Thetford, said the company had seen the potential benefits the feed-in tariffs would offer and expanded into solar thermal systems, with training part funded by the Beyond 2010 scheme (see panel).
Mr Hunton said: “In terms of installations things are still a little slow, as the impact of the recession hit people's ability and willingness to invest for the future.
“However as the technology improves, and markets increase, costs come down. I am confident that this year, perhaps stimulated by the feed-in tariff, we will see more people selecting solar thermal as part of their long term personal commitment to a lower carbon future."
As well as business and employment opportunities, the feed-in tariffs could also play a small but key role in meeting the country's energy needs and environmental targets.
The Department of Energy and Climate Change, which announced the tariffs, said small renewable systems could provide 2pc of the country's energy by 2020, and help boost the amount of electricity generated from renewable sources from the current 5.5pc to 30pc.
John Best, chief executive of the East of England Energy Group, said: “The feed-in tariffs bring one more dimension to the apparently simple, but in reality very complex, task of keeping the lights on.
“At one end of the spectrum we are dealing with householders and feed-in tariffs. At the other end there is the potential of multibillion pound contracts associated with heavy engineering aspects of developing offshore wind.
“It broadly comes down to the continued focus on the move to a safe, affordable low-carbon energy which can only be a good thing.”
Solar energy powers growth for electrician
A decision to move into solar panels had a dramatic impact on electrician Kerry Durrant.
Mr Durrant, from Blofield, has more than 20 years' experience as an electrician, and set up his own business, Durrant Electrical, from his home about six years ago.
After becoming interested in photovoltaic systems he then set up another company, Green Home Energy Solutions, in 2007, and became one of the first people in the county to gain accreditation through the official Microgeneration Certification Scheme.
And since exhibiting at a green home show at Felbrigg Hall last year, business has boomed.
With turnover in his former business peaking at £120,000 annually, Mr Durrant said he was now seeing sales of £50,000 a month and hoped to hit the £500,000 mark this year through PV.
He said: “That's a big increase, particularly in a recession. I underestimated the market, I really did.
“I'm not too fussed about competition. I'm going to have more than enough work to worry about, there's enough work for all of us.
“Getting in early was a big benefit to me.”
He added: “My customers are really clued up. They know their products. All they want is a local installer. As long as my prices are good it's all good news for me.
“The feed-in tariff is going to get more publicity. It certainly makes PV quite realistic.”
Feed-in tariffs - the facts
From April 1, new feed-in tariffs announced by energy and climate change secretary Ed Miliband come into effect, guaranteeing rates of payment for electricity generated from small renewable energy systems.
Different rates of pay have been set for photovoltaic, solar hot water, wind, hydroelectric, ground source heat pump and anaerobic digestion systems, ranging from 4.5p to 41.3p per kilowatt hour of electricity produced.
The payments also cover electricity that is then used by the household.
The schemes are designed to bring about a significant increase in the amount of locally produced green energy and offer a rate of return of between five and eight percent per year.
A typical 2.5 kilowatt, well-sited solar PV installation could reap up to £900 and save £140 a year on electricity bills, paying for itself in 10 years.
Studies show that small scale renewable installations could meet 2pc of electricity demand in 2020.
For more information visit www.decc.gov.uk
Grants available for renewable energy training - Beyond 2010
The Beyond 2010 scheme, funded by the East of England Development Agency, allows businesses, including sole traders, to apply for up to 50pc of the invoiced cost of training (excluding VAT) which is critical to improving their business performance by increasing sales or reducing costs.
Companies applying for a Beyond 2010 grant must provide written evidence that they fit within the low carbon and sustainable technologies sector.
Beyond 2010 runs until December 2010. For more information visit www.beyond2010.co.uk or contact Samantha Syrett on 01493 446506 or email firstname.lastname@example.org