My initial article was written around the medium term strategy, whereby prices of solar PV fall sufficiently by the end of 2017 for solar PV projects to be undertaken at the same IRR as previously, but without government subsidy.
However, there are ways in which this time frame can be accelerated. This series of blogs will examine the major ways that this can be done, in which case solar PV projects can continue to be undertaken even on today’s prices.
The first of which is through greater use of electricity on site.
It has been apparent for some time that the best way to install solar is in a circumstance where the electricity can be used on site. The obvious example of this is a solar PV installation on a building, where the electricity is used in the normal operation of the building. A civic building would be a good example.
If this is to be contemplated, then a full profile of the current electricity use needs to be prepared, to see what the best fit is in terms of capacity of solar PV to fit to the roof. As most local authorities are paying at least 10 pence per kWh for their electricity, the business case for such an installation works, even on current prices and without any government subsidy. Of course a small FIT rate might still be applicable, and will be a bonus.
Solar does not need to be fitted to the buildings themselves. Many buildings are unsuitable for one reason or another, but might have a large car park or the building might be situated in ample grounds, perhaps a County Hall. Both will be suitable to site the panels.
But what about solar farms? The comments above relate to buildings and many authorities want land based solar installations now. Here it is a little more tricky, as land based schemes tend to be a bit more rural.
However, don’t be hung up on not having a user nearby. Thinking out of the box, the question should be – can we create a new use on the land or nearby? An example might be a series of rural fields that a Council owns that are suitable for solar PV. The solar farm is planned and then a new market gardening opportunity is created on the remainder of the land, with the electricity providing the power to heat the poly tunnels.
The Council could contract out the operation of the market garden to a specialist operator, with the promise of renewable power at a guaranteed subsidised rate. Doing so will create some jobs and help the local economy at the same time as providing a customer for its power. As long as the power can be sold for the right rate, this will make the solar farm viable now, even without ROCs and on current PV prices.
There is usually a way to make the deal work and subsequent blogs will look at other acceleration options.