A happy new year to everyone! We hope you enjoyed a relaxing break and are as excited about 2013 as we are.
We are now installing as many RHI biomass boilers as possible before the window closes in early 2013, but lets not forget what a great year 2012 was. Both agricultural land and forestry continued strong, however our largest success was in solar where all in all we installed nearly 3MWp capacity in 2012.
At the end of March the Supreme Court rejected the UK government’s appeal over the feed-in tariff (FIT) ruling, returning originally deemed feed-in-tariffs of 21p/kWh back up to the original higher FIT rate of 43.3p/kWh.
Willow Rivers clients that purchased already-installed Solar Rooftop Assets during January and February 2012 are now ecstatic! With purchase price reduced to provide a 9.5% annual yield at 21p/kWh, these assets will now generate in the region of 19% per annum - inflation linked for 25 years.
To see how happy our clients are we have placed some testimonials online.
“We were always very confident the Government would lose their appeal in the Supreme court for their unlawful cutting of the feed in tariff.” says Willow Rivers Director Ben Jefferis. “We now have a large number of clients some with as many as ten systems that should all produce in the region of 19% per annum - at a time when a double digit inflation linked return is unheard of in the current climate.”
Wrexham County Council have pulled off an incredible feat; installing over 30,000 solar panels on 3,000 of council owned properties before the 3rd March 2012.
Whilst this is reportedly the single largest social housing solar scheme in Europe, Wrexham will be hoping for much more than prestige. With all systems installed and registered before the 3rd March 2012, these systems will all be applicable for having their feed-in-tariffs increased from 21p/kWh back up to 43p/kWh should the Government’s Supreme Court appeal be overturned. It is widely expected the Government’s 2nd appeal will be overturned, as they offered zero evidence in the first court appeal.
For more information on the Wrexham 5MW installation project, click here.
Is now the optimum time to invest in UK solar?
The UK solar industry is about to enter its next phase. Since the introduction of the UK feed in tariff back in April 2010 the industry has grown at an exponential rate. The falling price of solar panels coupled with aggressive marketing by solar developers has seen Septembers solar installation exceed all expectation. This curve will only escalate as we get closer to the feed in tariff review in April 2012. However there could be a substantial drop off should the government decide to bring forward its feed in tariff review, as is looking increasingly likely.
The feed in tariff when conceptualized back in 2010 was never meant to be this profitable for developers or rooftop owners alike. A privileged owner of a south facing rooftop in the Devon or Cornwall can expect a return on investment well in excess of 15% pa rising with inflation. This would result in a payback period of some 7 years at very conservative inflation levels.
You will have seen adverts for free solar installations; funds, institutions, pensions and the like are all pouring their money into the sector trying to secure as much double-digit, inflation-linked, government-guaranteed income as possible before the good time ends … and I suspect these contracts will be changing hands for significantly inflated prices in the next 5 years given inflation rates.
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The UK Solar Trade Association has recently launched a report claiming that the government has failed to recognize the potential for solar power in the UK. The Alternative Solar Revolution Strategy demands the government to ‘rethink’ solar to deliver a clear strategy and attract more investment to fuel a solar revolution in the UK.
“The Government has got it wrong on solar. We are on the cusp of a global solar revolution, major markets all over the world recognize that solar energy is critical to our future,” says Howard Johns, Chairman of Solar Trade Association. “Germany plans to generate 50% of its day time electricity from solar by 2020 – Germany’s targets are for 52GW of solar energy compared to 2.7GW for the UK by 2020. Community projects have been devastated by government decision making on solar.”
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Breakthroughs in solar technology are likely to drive the cost of solar energy below that produced from fossil fuels and nuclear reactors within five years, according to the global research director at General Electric (GE). Mark M Little, speaking in an interview with Bloomberg, predicted that the cost of solar energy will fall to $0.15 per kilowatt hour or lower. “You’re going to have a lot of people that are going to want to have solar at home,” he told the news agency.
It will be difficult to quantify the exact crossover point when solar becomes cheaper than fossil fuels, in part because of the volatility of fossil fuel pricing. However, the Energy Information Administration predicted in its May Short-Term Energy Outlook that the average cost of electricity will increase slightly this year. In January 2011, the average retail price of electricity to residential customers in the US was just under $0.11 per kilowatt hour. Throughout this year, it is expected to average 11.84 cents per kilowatt hour.