UK Installs More Solar Panels than Expected

How successful has the government’s incentive program for solar panels been? According to Bloomberg Business Week, almost embarrassingly successful. Based on systems registered for FiTs by the end of December, the UK’s solar energy capacity surged tenfold in 2011. That’s right. The UK increased their capacity to generate electricity through solar PV systems by a factor of 10 in just one year.

In 2010, the UK’s solar energy capacity was 76.8 megawatts. At the end of 2011, the solar energy capacity of the country had increased to 761.9 megawatts – and may even be considerably higher than that, because the registration for FiTs is lagging behind real-time installations. DECC estimates that the UK may actually be closer to 1.1 gigawatts – a capacity that wasn’t even on the radar when the programme began. At that point, the targets were 284 megawatts capacity from solar panels by 2013 and 832 megawatts installed solar PV capacity by 2015. That puts the UK nearly 4 years ahead of schedule in its adoption of electricity from alternative energy systems like solar PV.

Even more interesting is the composition of those numbers. According to DECC’s statistics, more than 230,000 solar plants have been installed since 2008, and about 90% of those have been small solar PV systems installed on residences. About half of the existing solar capacity was registered for FiTs in the last two months of the year, the data shows.

What sparked the enormous surge in solar PV installations? First, the cost of producing solar panels dropped significantly between 2008 and 2010, making the solar PV systems far more affordable to more people. The FiTs, which pays people for the electricity generated by their solar panels and other microgeneration systems, was also obviously a powerful incentive. The scheme gave those who were inclined toward solar panels but not fervent about clean energy an investment impetus to install solar panels with payments that could reduce the payback time of the equipment to about five years.

The biggest impetus for the sudden surge in solar PV installations, though, was most likely the government’s decision to reduce the tariff amount for future installations of solar panels – a decision which is, at this writing, blocked by the courts. The government is appealing that court decision. If the court stands by the original order, property owners who register new solar PV systems before the next scheduled decrease in April will qualify for the higher tariffs, while those who register after will receive a lower amount per kilowatt hour.

The reduction, which won’t affect any solar PV systems registered before December 12 and may not affect those registered before April depending on the courts, still leaves a fairly healthy incentive for property owners to install solar panels. The payments are guaranteed to continue for 25 years, and once a solar PV system is registered, the rate of payment will not be reduced. Those who register their solar panels while the rate is 43.3p per kilowatt hour will receive 43.3p per kWh for the entire 25 years. Those who wait and install at the reduced 21.1p rate will receive that rate for 25 years.

If you’ve been considering a solar PV system for your home, it makes sense to get your panels now, before further reductions take effect and reduce your incentives even further.