Just two years away: cheap, easy to make, 3rd generation solar cells

In 2018, the long-promised “third generation” of solar cells will be ready to come to market. These are very different from the solar panels we see around us today. Transparent, lightweight, flexible and highly efficient, they will be able to be applied to windows, metal, polymers (as in cladding) or cement, effectively turning buildings into energy generators.

They can work in lower light conditions than current solar technologies, and don’t have to face the sun.

The technology is known as perovskite solar cells. Recently, a research team headed by Professors Michael Grätzel and Anders Hagfeldt at the Ecole Polytechnique Fédérale de Lausanne established a new world record efficiency for the cells, with a certified conversion efficiency of 21.02 per cent, increasing from 3.8 per cent in 2009, making this the fastest-advancing solar technology to date.

With low production costs, many start-up companies are promising modules on the market by 2017.

Dyesol Limited is one such company focused on commercialising these cells. Dyesol has been around for many years, longer than most of its competitors, and has secured several key patents in the field.

Three years ago it switched its research and development from dye-sensitised technology to perovskite because of its advantages.

Based in Australia, its chief executive, Richard Caldwell (above), recently released a levelised cost of energy study (which enables comparison with the market price of other energy technologies). This demonstrated costs of between 9.6 and 12 Australian cents per kilowatt-hour for the panels when manufactured and utilised at a relatively small scale. This compares to around 10-11 cents for conventional solar – about the same, but before mass production.

At the end of last year Caldwell reached an agreement with the Australian Renewable Energy Agency to receive $450,000 funding support to progress the technology towards scalable manufacture and mass commercialisation. ARENA has established a production cost of 25 cents per watt.

“The payback period for installation is a matter of a few months, as they are less energy intensive to produce than the current (usually silicon based), which take several years,” Caldwell says.

“This is extremely exciting, as it allows us to transition to a clean energy society without any subsidies from the government.

“BIPV – building-integrated photovoltaics, in other words putting solar power generation on the surface of buildings – is the holy grail of the industry and because perovskite is ultra-thin it can easily be incorporated in buildings,” he said. “But that’s longer term. We will first produce a free-standing unit for market entry, then integrated.”

The company publishes quarterly updates of progress to demonstrate progress. Caldwell says that its next landmark later this year is “the production of panels about one metre square”, with countries like Turkey partnering to produce them.

“By 2018 we hope to be in mass production of this new product.”

The first product will feature a glass substrate, allowing light through to the interior of the building. The following year, metal-printed panels will be on the market, the company says.

Australian support

Dr Richard Corkish, chief operating officer at the Australian Centre for Advanced Photovoltaics, which has been responsible for many of the improvements in silicon solar panels the world uses today, told the ABC: “Most of the important advances in solar cell work in the past has been in making incremental improvements on the same old technology that [was] invented way back in the 1950s, but [is] now much, much better.

“[Perovskite] has captured the excitement of the whole photovoltaic research community. This material might in the future offer an alternative to silicon for the main solar cell material. Our research partners – Monash University and the University of Queensland in particular – are at the forefront of this area in Australia.”

Caldwell says “the new political regime in the Australian government is more favourable to us and the Turkish government is also very supportive.”

He welcomed Bill Gates’ recognition of the technology during the Paris climate talks, when Gates joined 27 other wealthy investors to start a new investment fund called the Breakthrough Energy Coalition, to push more public and private sector funds to clean energy technology.

Gates called PSC “disruptive” and said: “When people start talking about perovskites, painted solar applications etcetera, a lot of it is down to the physics, so the majority of the money will flow through the fund.”

The technology

The most commonly studied perovskite absorber is methylammonium lead trihalide, which uses a halogen atom such as iodine, bromine or chlorine.

Unlike traditional silicon cells, which require expensive, multistep processes conducted at high temperatures (>1000 °C) in a high vacuum in special clean room facilities, the organic-inorganic perovskite material can be manufactured with simpler wet chemistry techniques in a traditional lab environment.

Methylammonium and formamidinium lead trihalides have been created using a variety of solvent techniques and vapour deposition techniques, both of which have the potential to be scaled up with relative feasibility. These techniques reduce the need to use so much polluting solvents.

Issues yet to be resolved are around stability, as the material can degrade, reducing its efficiency.

Dyesol is developing and testing this. Its most recent newsletter, published last week, announced that a test strip passed 1000 hours at 85°C with a loss of under 10 per cent. That is still a lot, so work is underway to reduce this deterioration with different types of encapsulation. To be fair, early silicon panels suffered from a similar problem.

A related challenge is cheap and environmentally friendly electricity storage, enabling solar electricity to be used also at night.

But for now, having been heralded for a long time, very cheap solar power that lets every building or object coated with it generate electricity is now within reach.

David Thorpe is the author of:

• Solar Technology: The Earthscan Expert Guide to Using Solar Energy for Heating, Cooling and Electricity


• The ‘One Planet’ Life: A Blueprint for Low Impact Development


• Energy Management in Buildings: The Earthscan Expert Guide


• Energy Management in Industry: The Earthscan Expert Guide


• Sustainable Home Refurbishment: The Earthscan Expert Guide to Retrofitting Homes for Efficiency

Energy storage: the next growth market in US and Europe

Energy storage is the currently missing link that will enable the intermittent renewable energy sources like wind and solar to play a much greater part in the future grid mix.

Now that more homes and businesses are installing photovoltaic systems, a new trend for combining these with battery backup is emerging.

Previously, battery storage systems were only thought necessary with solar PV and wind in stand-alone systems, separate from any grid connection, but as the grid supports more and more PV and wind systems, which can supply power only at certain times, the need for storage backup is becoming more apparent.

For large commercial installations this is especially attractive because, although they may have negotiated contracts with utilities that bring down their overall electricity rates, the fees that they are charged for the times when they do draw power, which can be based on their highest peak energy use during a month, have been rising as much as 10-12% per year.

According to Marcus Elsässer and other executives attending the Intersolar North America 2013 trade show held over the last three days, large commercial electricity users can reduce their peak demand and lower their demand charges by installing a storage system alongside a PV system.

Last month California set a proposed 2020 procurement target of 1.3GW of battery storage for network operators.

In Germany, grants from a scheme with a total value of €25 million are being offered to offer storage to existing solar installations.

Last month's Intersolar Europe trade show consequently saw over 200 exhibitors, including major brands, presenting their storage and smart grid solutions.

There, energy storage systems had their own dedicated section for the first time in any global energy trade fair. This particular show, the largest in the world for the solar industry, was attended by over 50,000 visitors from 47 different countries.

Energy storage plus PV was a key topic, with reference to many different types of storage, not just batteries, including flywheels, capacitors, heat storage and compressed air.

The German support scheme is managed by the state KfW Group bank, which provides a 600€/KW grant for new PV systems and 660€/KW grant for older systems. To receive support, systems must be in Germany, have a duration of at least five years, and no more than 60% of the installed power can be fed to the grid.

According to ">Ash Sharma of IMS Research, by 2017 the storage market is projected to be worth $19 billion, mainly due to the German scheme being taken up by residential system owners and operators of small systems up to 10 kWp.

As a whole, photovoltaic storage installations will, on average, he says, grow by over 100% for the next five years, up to nearly 7GW, rising to 40GW of battery systems by 2033.

Will this catch on here? The UK Department of Energy and Climate Change (DECC) is currently reviewing energy storage demonstrator proposals entered into a £17 million procurement competition.

There is a wide variety of entrants including some seemingly bizarre technologies: hybrid batteries to grid, smart energy storage, a radical proposal for using surplus energy to lift heavy aggregates that would be allowed to descend and generate energy at times of peak demand, flywheels, the use of electric vehicles for storage, liquid air, the conversion of surplus electricity into methane, cryogenic liquid nitrogen energy storage, and industrial scale lithium ion batteries.

A further potential winner under this scheme is Moixa Technology, an EU pioneer of smart direct current (DC) technologies, which has submitted a bid to install Maslow storage technology across 750 homes.

It works by shifting DC (direct current) loads from lighting, communications and electronic devices, to batteries during low tariff times, charged using local renewable sources such as solar PV, or at times of excess, wind power.

Simon Daniel, the CEO of Moixa, commented on the need for storage: “Just this week, the volatility of solar and wind resources created negative electricity prices and renewable curtailment in parts of Europe".

He says British distribution network operators face similar issues, especially at times of high sunshine, as now, or high winds. Daniel says that without using energy storage "considerable infrastructure upgrade costs, to reduce voltage issues caused by rising solar PV adoption" could result "which could otherwise lead to local blackouts or lost renewable revenue”.

He continued: “We’ve estimated that by using Maslow distributed energy storage systems with local solar PV, excess wind supply and low overnight energy prices, energy bills could be reduced by up to 30%, and keep essential consumer devices online if the grid fails”.

According to Anthony Price, director of the Electricity Storage Network, Britain should aim for an energy storage target of 2020MW (2.02GW) by 2020.

Speaking at the recent energy storage conference organised by the Institution of Mechanical Engineers, he said: “Meeting Britain’s power requirements requires energy storage as well as generating capacity. The expected shortfall in reliable generating capacity has been caused, in part, by a lack of commitment to a balanced portfolio of generation, storage and network investment.

"Adding more electricity storage into the power system will bring real long term benefits."

Sounds like a good bet for investors to me.

As PV installations double, everyone is urged to install LEDs

“It’s important for mac birmingham to be as sustainable as possible,” says Simon Creed (left), head of technical resources at mac birmingham, here seen with Paul Hutchens, managing director of Eco2Energy in the art gallery.

There was a huge increase in installations of feed-in tariff-linked solar PV systems in Britain during June 2013. 64.4MW of PV were installed over a four-week period from June 3 to June 30, according to figures supplied by DECC.

That is over double the 30.7 MW installed over the previous four-week period.

As prices have come down, the number of installations has increased throughout 2013, with 215MW installed in the first six months of the year.

Even so, there is no denying that the upfront investment is high. For those in charge of commercial and domestic environments, there is a wide choice of much easier ways to reduce a carbon footprint and see drastic reductions in energy bills.

According to Steven Ellwood, Managing Director of lighting provider BLT Direct, switching conventional lights for LEDs can provide a quicker, more reliable and higher return on investment than installing PV solar, since it is so easy and prices of these units are also tumbling.

They fell by 1% on the global market in the same month, June.

“Energy-saving lighting solutions are a much faster and more convenient way to give a home or business an eco-friendly twist," says Ellwood. "They are easy to install, they start making savings immediately, and there is not a huge initial outlay to add them to a home or commercial environment.”

The vast majority of the energy-saving LED lighting solutions that are on the market nowadays have bases which are compatible with existing fittings in many buildings.

Often it is just a case of simply replacing the old bulbs or strip lights. However, it is recommended that reputable installers and brands are used, since some products now available are of poor quality.

Even ‘feature lighting’, such as those commonly reserved for high energy-using halogens, are available in LED fittings, reducing energy usage by around four-fifths or 80%.

Although more expensive, LEDs can pay for themselves through the energy saved within six to nine months.

These bulbs also have much longer lifespans, meaning that once installed, they immediately begin to save money and contribute towards helping the environment for many years at any time of the day or night, says Ellwood.

Moreover, he adds that they also make a good companion to solar panels, since they reduce overall electricity requirements, meaning that the electricity from the panels will go further.

Birmingham's arts centre lights the way for sustainability

For instance, Birmingham’s popular arts centre, mac birmingham, is set make significant energy savings and reduce its light pollution, thanks to advanced LED lighting installed by energy efficiency specialist Eco2Energy.

The £7,000 investment is expected to save mac over £3,000 per annum on energy running costs and reduce CO2 usage by approximately 5,918kg each year.

Attracting over 850,000 visitors per year, centre is planning to make even more energy savings by replacing a further 250 lights.

“By making a relatively small investment, we’re able to further reduce our carbon footprint and save on energy costs,” commented Simon Creed, head of technical resources at mac birmingham. “It wins on every level and with payback on our investment expected in less than three years, we couldn’t be happier."
It is not the first investment in green technology at mac birmingham.

The complex kick started its ‘green initiative’ in 2012 with a 9.9-kilowatt solar PV system installed by Eco2Energy’s sister company Eco2Solar.

It now generates over 9,000 units of green energy per annum, equivalent to making 214,000 cups of tea.

“It’s important for mac birmingham to be as sustainable as possible; our aim is to be as energy efficient as we can and share this with our visitors by creating a ‘green zone’," said Simon Creed.

Midlands based Eco2Energy, part of Eco2 Solutions Group, was appointed as project installer to replace 100 track lights with high energy efficient LED lighting in the complex’s public galleries and main gallery.

Paul Hutchens, managing director of Eco2Energy said: “mac birmingham is a prime example of how businesses can invest in smart energy technologies and see immediate savings.”

“It’s excellent to see such a prominent complex in the regional arts community be so passionate about becoming totally energy efficient.”

Eco2Energy has developed its own ‘business friendly’ smart energy assessment designed to make energy efficiency simple for businesses.

Eco2Energy’s low carbon consultants work with businesses to review current energy usage, identify where savings can be made and make recommendations on the best efficiency measures to reduce carbon omissions and energy bills.

With a comprehensive range of smart energy technologies including LED and Low Energy Lighting, Voltage Optimisation and Building Energy Management. Other energy-saving solutions include Energy Efficient Cooling and Insulation.

UK power "will be 85% more expensive" without energy storage

Without large-scale energy storage, the UK government won't meet its renewable energy ambitions, says Edwin Koot, CEO of SolarPlaza.

The price of power in the UK will be 85% more expensive than in Germany (Europe’s biggest energy market) by May 2015, according to data compiled by Bloomberg.

U.K. power will cost £53.06 per megawatt-hour in May 2015, compared with €33.30 in Germany, according to fair value calculations on Bloomberg as of 8:40 a.m. in London.

They attribute the stark difference to Germany’s advanced renewable energy programme, which accounts for 30% of power generation, compared to the UK’s, currently standing at 11.3%.

The 2015 picture compares with an average premium of 17% over the past five years and 80% today, according to data from Marex Spectron Group Ltd., a London broker.

While Germany is seeking to consolidate its status as Europe’s biggest producer of wind and solar power by boosting its share of renewables-sourced energy to 35% in 2015 from 22% last year, the UK is targeting 15% from 11% over the same period, and is predicted to fail to meet the 20% 2020 EU-wide target.

Statkraft AS is closing money-losing gas-fed plants in Germany, while Macquarie Group Ltd. (MQG) and Vitol SA are buying British power stations, betting on gains of as much as 19% in U.K. prices by 2016, according to Societe Generale SA.

“The U.K. has built significantly less renewables to date,” Ilesh Patel, a partner at Baringa Partners LLP, a consulting firm that counts EON SE and Electricite de France SA (EDF) among its clients, said. “Germany has been on a fast-track wind and solar plan.”

Many critics of investment in renewable energy in the UK point to the fact that Germany, which is investing heavily in renewable technologies in its push to abandon its reliance upon nuclear power, currently has higher power prices than the UK.

However, Ed Davey, Energy Secretary, has consistently said that Britain's programme of supporting renewable energy will eventually lead to lower prices.

The key to this development may be investment in energy storage.

Germany is offering incentives worth €25 million to help subsidise the installation of batteries alongside solar PV systems to store electricity for use at night time. Simon Daniel, Founder of energy storage company Moixa Technology, says this "is helping our European neighbour to realise the full potential of renewable technology".

The UK Minister for Energy and Climate Change, Gregory Barker, is to deliver the keynote speech during the upcoming Solar Future UK ’13 event on July 16 at which he is expected to enlarge on his announcement, made at the recent Intersolar conference, that Britain hopes to deploy 20 GW of PV by 2020, in relation to how this affects Britain's energy storage capacity.

At the Intersolar event, Barker said that "the UK Government is totally committed to building a world-class renewables industry” and quoted Prime Minister David Cameron as saying that he wants to "make Britain a global showcase for green innovation and energy efficiency".

At the following day's Energy Storage UK '13 conference, leading industry spokespeople and cleantech businesses from the UK’s energy storage sector will discuss how the latest energy storage systems (ESS) will advance the integration of renewable energy, such as solar PV and wind.

"Deployment potential of solar PV is greater than the UK’s grid storage capacity," comments the CEO of SolarPlaza, Edwin Koot. "Without large-scale energy storage solutions, the UK Government’s ambition to reach this figure presents a significant challenge for National Grid, which has already warned that building more than 10GW will make it difficult to manage the network in its current form."

Director of the Electricity Storage Network, Anthony Price, is warning that "if the Government does not support the use of storage as part of the solution to meet our power shortfall, we will lose this opportunity, and live to regret it.

"What is low cost now will take us down power’s one-way street. It will be difficult and costly to reverse. Our plans for the Smart Grid show we need storage and we must seize this opportunity now.”

The intermittency of solar PV and wind requires utilities to maintain additional spinning reserve from polluting power stations to pick up loads, or, in the future, use demand-side reduction techniques in the capacity market, in the event of peak demand spikes.

If the potential of intermittent renewables is to be fully realised, the National Grid will require fast-acting energy storage systems that can dispatch power and respond quickly to network imbalances, says Price.

That the power industry and policy makers are not paying sufficient attention to the challenges arising from integrating intermittent power generation into the system was felt by 60% of attendees polled at the recent POWER-GEN Europe and its co-located conference, Renewable Energy World Europe, between 4-6 June at the Messe Wien, Vienna.

FITs reductions get mixed reaction from renewables industry

One installer says the new proposals "could spell Armageddon for the industry".

The solar industry has responded with mixed feelings to DECC's new proposed changes to the Feed-In Tariff system for small scale renewable energy, announced yesterday.

In its response to the consultation on FITs for solar PV, the Government admits that 81% of respondents disagreed with their proposed reduced tariffs for solar PV installations and with the proposed reference date of 12 December 2011, compared to 12% who agreed.

Nevertheless, it is proceeding with the tariff reductions, and the appeal to the Supreme Court over the legality of the cut-off date for the high tariff rate.

The new tariff rate includes a drop to 21p/kWh for systems under 4kW, until June 30. It estimates the cost to taxpayers of all the new tariffs to be ￡1.2 billion over 25 years.

The reductions are based on research showing that the average cost of a 2.6kW system has dropped from ￡15,000 in 2010 to ￡12,000 in 2012. They aim to provide an approximate 5% rate of return to their owners for well located installations.

DECC projects around six million installations by 2020 based on the new tariffs, which over their lifetime will involve total costs, the Impact Assessment says, of ￡54.3 billion. [Note: the document contains several errors so this figure, high as it seems, may not be correct.]

Nevertheless, the Impact Assessment calculates a net benefit of around ￡400 million because the savings on social costs outweigh the overall costs, compared to a loss of ￡600 million under the original scenario.

The response does contain a concession to objectors from the solar industry: that the energy efficiency requirement that will be a condition of receiving FIT support should be based on an Energy Performance Certificate (EPC) rating of level ‘D’ or above, not the more stringent level ‘C’, as previously mooted, as this excluded too many homes.

Even so, it will almost certainly exclude the majority of old, solid-walled homes, that do not have wall insulation. DECC estimates that about half of all properties are already at the ‘D’ rating level.

A second concession is that the threshold at which the multi-installation tariff rates would apply has been increased from more than one PV installation to over twenty five. These rates are set at 80% of the standard tariffs to reflect the economies of scale gained from tackling several roofs at once.

Individuals or organisations with 25 or fewer installations will still be eligible for the individual rate.

"This will help community groups, small businesses and councils who do not benefit from the economies of scale that larger aggregators can obtain," said Energy Secretary Ed Davey.

DECC says it is using budget flexibility to cover the overspend resulting from high PV uptake of 240,000 installations over the last year, while still allowing ￡460 million for new installations over the Spending Review period.

The statement says this will not impact any further on consumer bills, since DECC is juggling overspends and underspends in the overall amount allocated to it for renewables under the Comprehensive Spending Review between the budgets for FITs, the Renewables Obligation, and the Warm Home Discount.

What happens beyond June?

A new consultation is beginning, and it is this which so far appears to be the most disheartening for the solar industry, for it proposes a reduction of 10% of solar PV tariffs every six months, with an added deployment trigger to ensure that subsidy levels keep in step with the market.

It is based on projections which estimate that system costs will fall by two thirds by 2020.

The proposals would make the tariffs from 1 July onwards dependent on the levels of actual deployment of new eligible installations seen in March and April.

They outline three ways of calculating the level, which could bring rates down as low as 13.6p/kWh for installations below or equal to 4kW.

This structure is aimed at protecting the scheme's budget and creating long term certainty for consumers and investors about what the FIT rates will be.

However, one installer said this "could spell Armageddon for the industry. Yet again the Government, even with a newly appointed Energy Secretary in Ed Davey, seem happy to watch the solar industry lurch from one crisis to the next," said David Hunt, a director with Eco Environments.

Friends of the Earth's Executive Director Andy Atkins also said that the "distinctly unclear solar road map leaves a dark cloud hanging over thousands of jobs".

But others welcomed the news.

Robert Goss, Managing Director of Conergy UK, called it "a very good day for British solar. There will be a boom in May and June as people look to complete installations before the June tariff reduction, with returns of seven to nine percent".

A spokesperson for Good Energy said they considered this "a step forward".

"The industry was in desperate need of more clarity and the government has moved to provide that," said its CEO, Juliet Davenport. "The rate changes proposed for solar PV are a reflection of the well-known problems with the FIT budget and it will take time to fully digest what they mean."

Ed Davey said the proposals, "will remove the need for emergency reviews, consistent with our commitment to a stable, predictable future for solar PV and for the whole FITs scheme.

"It will also help to keep the long-term costs of supporting solar PV down, increasing the number of people able to benefit from FITs over time," he added.

The consultation closes on 3 April.

Other FIT technologies

A further consultation has been launched on tariffs for technologies other than PV, including potential arrangements for community projects.

Significantly, it proposes an increase in the rate of return available for micro-combined heat and power, as ministers believe this could bring multiple benefits.

It also outlines potential tariff guarantees for wind, anaerobic digestion and hydro projects, to provide greater certainty about what rates of return they will receive.

This was welcomed by Don Leiper, Director of New Business at E.ON, which has been investing for a few years in micro-CHP for the home market.

He called it "a key step towards building a mass market for what is a smarter home heating and power solution that can save customers money and contribute to saving the planet".

E.ON calculates that under the new Feed-in Tariff scheme, homeowners installing microCHP could see financial savings of more than ￡600 per year, including electricity savings of ￡194 and export payments of ￡46.

This consultation closes on 26 April.

Concluding the announcements, Climate Change Minister Greg Barker said: “Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry.

"We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment."

The impact of the FIT cuts on solar have captured the headlines, but they have also affected small wind power installations.

Trade association RenewableUK said tariffs for these have been slashed by over 40%, while farm and small business-scale turbines have seen cuts of over a quarter, and it expressed anxiety over the possible impact on jobs.

Story: David Thorpe, News Editor

The solar PV feed-in tariff crisis is one sign of a maturing industry

The furore over the change in the Feed-in Tariffs to small-scale photovoltaic (PV) electric power in the UK, with Friends of the Earth (FoE) and some companies threatening legal action, is just one part of a larger upheaval that is affecting the solar electricity industry globally.

Prices are falling, companies are going under, and a trade war between the US and China is looming.

At the same time, the number of installations and the generation capacity of PV are at a record high.

In Italy, experts are predicting that solar power will cost the same as ordinary electricity in 2014, with the rest of Europe following up to 2020.

As I have to speak on the subject at this week's Solar Flair '11 conference, I've been taking a closer look at the solar industry.

What I've found shows that, although they may be right about the government's mis-timing of the tariff change, FoE and their supporters are wrong to insist that the tariffs stay high.

To see why, we need to look at the wider context.

The state of the solar industry

Along with the whole of the renewable energy sector, which globally is seeing growth rates of up to 70% every year, PV is booming, despite the economic recession and public finance crises in many parts of the world.

But it is experiencing disruption caused by its transformation into a mature energy sector.

The latest figures show that the total installed PV capacity in the world is now 40 GW. This generates a huge 50 TWh/yr (EPIA 2011).

Last year, the EU installed over 13GW and the rest of the world installed over 17GW. For the first time ever, during 2010, Europe added more PV than wind capacity.

The new kid on the block, concentrating PV (CPV), is also doing well, with 0.02 GW connected to the grid worldwide during 2010 and early 2011.

Meanwhile, fossil fuels' annual growth is in the low digits, and nuclear's share is further shrinking.

But scratch a little deeper and you see that things could be better still.

PV is still generating less than 0.2% of total global electricity demand.

With the IEA projecting that electricity demand (18 trillion kWh) will rise by 76% to 4.7TWh by 2030, even if PV keeps up its current expansion rate it will barely keep pace with the increase in overall demand.

To make a real difference, deployment must increase at an even faster rate, which requires strong, international political will.

Falling prices

But the real good news is that the price of PV modules is falling fast.

In seventeen months the lowest price of mono-crystalline modules has been cut by 45% from €1.65/Wp to €0.91/Wp.

The more efficient multi-crystalline module price has fallen by somewhat less: 28% to €0.93/Wp.

The price of thin-film modules has fallen 32% to €1.3/Wp (prices from Solarbuzz).

And next year this downward trend is projected to continue with a further 10% price reduction.

Despite this, the cost of PV at the global average utility scale is still 3-4 times that of onshore wind & biomass.
Nevertheless, at this phenomenal rate of reduction, the forecast is that prices will be between €0.08 and 0.18/kWh in 2020 (depending on the application), matching the price of conventional grid electricity in many areas of Europe.

As the EPIA says in this year's market survey: "The price of PV modules has decreased by over 20% every time the cumulative sold volume of PV modules has doubled."

Falling revenues

This success is partly the cause of the industry's turmoil.

Although in this quarter revenues are forecast to rise by 22%, next year they are forecast to drop by 25% because of three factors: major cuts in solar incentives, a weak project financing environment, and the module price crash that is causing downstream companies to offload their stock or face significant write-downs.

So in the first three months of 2012, the market in Europe is projected to be down 72%, with the ground mounted (solar farm) segment the hardest hit and the residential sector the least affected (down 41%).

But Greece (fortunately for its financial state), Spain, and UK are still slated to provide the highest incremental market share growth opportunities.

Falling share prices

All these forecasts are hitting share prices.

German market leaders SolarWorld and Q-Cells are among the solar companies suffering, because last year they ramped up production to meet the surge in demand from Germany, UK and Italy due to the feed-in-tariffs.

SolarWorld, Germany's number two solar company by sales, has cut its projections and no longer expects 2011 revenue to reach 2010's €1.3 billion.

The situation is no different in China.

Shanghai-based JinkoSolar has forecast a 10% reduction in quarterly module shipments to 210-220 megawatt (MW), and expects revenue to be down by a similar amount at $270-$280 million.

Similarly, Daqo New Energy, Yingli Green Energy and ReneSola Ltd have also cut their shipment and profit margin forecasts.

First Solar, Suntech, Yingli, and Q-Cells (once the world's largest maker of solar cells) all have their shares down by around 25%.

American backlash

Even more dramatic shakedowns have been happening in the American solar industry, with Energy Secretary Steven Chu taking huge political flak for making a half-billion-dollar loan to California solar company Solyndra, that later went bankrupt partly because of the fall in module prices.

This and other bankruptcies and layoffs are being blamed by some on competition from China, whose solar cell prices are undercutting those of US manufacturers. (The cells are often assembled into modules by different companies.)

As a result, there are calls for an import tariff, which would lead to a crazy China-US trade war.

The industry is already divided amongst itself on the issue.

Germany's SolarWorld, which owns American factories, is pitched against a new body called CASE, or the Coalition for Affordable Solar Energy.

This is comprised of Carbon War Room, MEMC, SolarCity, SolarFirst, Sungevity, Suntech America, SunRun, Trina Solar, Verengo, Yingli Americas, Recurrent Energy, and others.

Billions of dollars are at stake, plus tens of thousands of jobs (the US solar industry, one of the world's largest, employs 100,000).

"The imposition of tariffs will be a setback to the US solar industry," is the view of Kevin Lapidus, Senior VP and General Counsel at SunEdison, part of MEMC.

My view is that this makes complete sense. It is hypocritical of anyone in the US to fight market forces, which are making solar power more affordable for everyone.
The US should quit moaning, import the cells from China as cheaply as it can, and make money on the rest of value chain - module manufacturing, installations and service.

The British solar storm

The US situation makes the UK FITs fiasco look like a storm in a teacup.

The proposed tariff fall of 50% from 42p to 21p per kWh more or less mirrors the fall in the cost of the modules themselves.

Installers are able to buy their products at discount prices now. They'll need to change their marketing tactics, and there will be less business, but sensible installers will diversify into renewable heat and energy efficiency, for which subsidies are also coming.

Indeed, not all installers oppose the cut. Sheffield-based company A Shade Greener doesn't believe its own business will be hurt.

The wrong technology

The real question is: is PV cost effective in the UK? In other words, if the government has limited cash to spend on cutting carbon emissions, which it does, is it worth spending it on PV?

The short answer is: no. And here is the evidence.
According to the last available comparative figures, from the government's Explanatory Memorandum To The Electricity And Gas (Carbon Emissions Reduction) Order 2008, the cost in pounds sterling of saving one tonne of carbon for each renewable technology in the domestic sector is as follows, in order of ascending price:

Community heating with wood chip: £3
Ground source heat pumps: £42
Wood chip CHP: £49
Wood pellet boilers (primary): £58
Micro Hydro (0.7kWp, 50% LF): £60
Log burning stoves: £110
Mini-wind 5 kW, 20% LF: £125
Wood pellet stoves (secondary): £126
mCHP: £176
Photovoltaic panels (2.5 kWp): £218
Solar Water Heater (4m2): £346
Micro Wind (1 kWp, 10% LF): £685
Community ground source heat pumps: £697

This makes PV seventy times more expensive than a district heating system using woodchips and five times dearer than ground source heat pumps.

Saving energy saves public money

And this doesn't even take account of energy efficiency measures.

Again, on the government's own admission, as the AECB recently pointed out, properly insulating buildings saves ten times more greenhouse gas emissions per pound spent than the current Feed-in Tariff (FIT) for renewable electricity - and will still offer five times the abatement per pound, even if the tariff is cut.
As the AECB's Andrew Simmonds says, energy consumers are being told to finance a vast increase in electricity generation and transmission, but if demand was cut few of these new power stations would be needed.

Put another way, properly insulating buildings offers the same carbon and energy benefit as building offshore wind turbines at around a fifth of the cost.

Looked at from this angle, the FITs policy is the gift of a sledgehammer for climate loony James Delingpole with which to attack the Government's climate and energy policy.

He is, for once, not entirely wrong to point out in these cash-strapped times, with fuel bills high anyway, the government is pushing them up still further by financing a form of power generation that doesn't even work efficiently in most of the UK because it doesn't get enough direct sunshine throughout the year.

If you need more evidence, here's another table, adapted from the same government source, detailing the number of kilograms of CO2 saved per pound spent by technology, if they are delivered as a single measure (we ought to include energy efficiency measures, because the goal is really to save carbon emissions):

Existing community heat to CHP: 88
SWI* internal to U of 0.45W/m2K: 42
SWI* external (semi-det house): 25
Wood pellet boilers (primary): 24
Fuel switching to green tariff: 24
SWI external (flat): 23
Loft insulation (prof virgin): 21
Micro Hydro (0.7kWp, 50% LF): 16
Ground source heat pumps: 14
Replacing old boiler (65% by 88.3%): 13
Air source heat pump: 13
MCHP (revised): 9
Glazing E to C rated: 8
Loft insulation (prof top-up): 7
Heating controls - upgrade with new heat system: 6
Mini-wind 5 kW, 20% LF: 4
Solar Water Heater (4m#): 4
Flat roof insulation (whole house): 3
Underfloor insulation: 3
Photovoltaic panels (2.5 kWp): 3
Community heating meters: 3
Draughtproofing (ie not with glazing): 1
Micro Wind (1 kWp, 1% LF): 0
* SWI = solid wall insulation

By the way, I don't believe the figure for draughtproofing, and the one for micro-wind would only be true in urban areas, but the rest of it looks convincing.

Again, PV is more or less at the bottom of the list for cost-effectiveness: 14 times more expensive than internal solid wall insulation.

And look at how combined heat and power (CHP) comes at the top of both lists. Why is it so backward on supporting CHP?
The government has achieved its other policy objectives for FITs: heightening awareness of renewable energy and climate change amongst the public and bringing down the price of solar through upping demand.

It is absolutely right to link the FIT in future to energy efficiency measures.

But why-oh-why has it implemented the whole set of policies back to front? The Green Deal for energy efficiency should have come first, followed by the Renewable Heat Incentive, and only then, possibly, Feed-in Tariffs for electricity.

Solar prices will continue to fall anyway, improving the payback period for those who do want to install PV modules.

My advice to the solar industry: your sector is growing up. It will soon survive without subsidy if you go where the sun is, which is where it makes sense financially anyway.

Was the Treasury right about cutting support for larger solar installations?

The UK solar PV industry has been griping about the loss of support for installations over 50kW, but the big market changes happening elsewhere in the world suggest that the Treasury may have - albeit accidentally - backed the right horse.

Today's big announcement is the filing for bankruptcy of a California firm, Solyndra, that made photovoltaic modules - despite it having received over half a billion dollars of subsidy from the Obama administration. Republicans are already seizing on this as proof of wasted taxpayers' cash.

Contrarily, there has been a recent trend in the American sunbelt areas for plans for big solar power station developers to switch from using solar thermal technology to PV. At least three gigawatts of PV has been gained this way from solar thermal.

A year ago, my money was on solar thermal to be the favoured renewable technology of the future in these sunbelt areas with their clear, hot skies.

Solar thermal is well understood, and even offers the prospect of cheaper energy storage than the batteries that must be utilised with PV modules - they use molten salt to store the sun's heat for the night-time in order to continue to drive the plant's turbines.

Solar thermal plants have a further advantage - they can be hybrid plants, cogenerating the heat required to power the traditional design of electricity generating turbines with other fuels such as coal or gas.

But, if PV is now in such demand, why is Solyndra closing down, with the loss of 1400 jobs?

It is because prices of solar modules have fallen astonishingly fast.

Prices of PV modules coming out of China have fallen by 30% and are 10 - 20% cheaper than U.S.-made panels.

For three years there has been an oversupply of modules. Factory gate prices are now much cheaper than retail prices. In Europe they average Euros 2.51 per peak watt. Some are available for as little as $1.30 a peak watt.

Cheaper labour forces has led to factories being built in low-cost locations like Mexico, China, Taiwan and Eastern Europe for module production by big Western names such as Q-Cells, BP, SunPower and Evergreen - which filed for chapter 11 restructuring bankruptcy last month due to the competition from the far east.

(It's slightly more complex than this in Solyndra's case - Solyndra invented a solar panel that didn’t use expensive silicon, but since then - fortunately - the price of silicon has plummeted, leaving Solyndra's panels too expensive to compete.)

In America, solar is supported by policies at the federal, state and local levels.

At the federal level, there are Investment Tax Credits (ITC) and Treasury Cash Grants to support investments in the PV industry. At the state level, Renewable Portfolio Standards (RPS) fuel demand from utilities, which is responsible for % of 31% growth in the US market, projected to rise to 60% in 2015 by market analysts Solarbuzz.

It forecasts the US to become the third-largest solar photovoltaic market, behind Germany and Italy in 2011, leaping from 5% of the world PV market to 12% by 2015.

Italy is having a solar renaissance. Today a completion of a 48MW power station is being celebrated in North Italy, built by German firm S.A.G. Solarstrom. It will produce more than 64 million kWh of power per year. The project is the largest so far in the history of S.A.G. Solarstrom AG and its sales process is also going according to plan.

The company's CEO, Dr. Karl Kuhlmann, said that its 2011 forecasts of EUR 280 million sales were on schedule “despite the German market losing a lot of momentum” due to the reduction in feed-in-tariffs in Germany.

Part of the reason for giving a stimulus to a domestic market like feed-in-tariffs is to force down prices by encouraging mass-production. Other countries have had these tariffs for years - and it looks, globally - as if the tactic has been phenomenally successful.

So successful that China is copying it – with a new feed-in-tariff (FIT) incentive programme that will potentially increase installations to reach a total of 2.4GW in 2012.

In 2010, U.S. solar firms achieved a positive trade flow of $1.9 billion globally, (GTM Research and SEIA®’s U.S. Solar Energy Trade Assessment 2011.

It was a record year, with exports of over $5.6 billion, being shipped mostly to China and Germany, and imports of $3.7 billion of mostly already assembled PV modules mainly from China and Mexico.

The trade balance in PV technology with China was positive to America's benefit by $240 million - but mainly in capital equipment and the raw material polysilicon.

China sold the PV modules it made using these back to the U.S. This trend is now only going to increase. China will dominate the solar module supply market, and the world will benefit from lower prices.

Back in the UK, which sadly doesn't get as much sunshine as California or Italy, the amount of electricity you can generate per pound spent on photovoltaics is far less than that you can get by spending it on other renewable energy sources, like wind or biogas.

A feed-in-tariff favouring householders may be a good way of popularising renewable energy and energy awareness among the general public, but it is not a cost-effective way to generate energy.

With prices at record lows for the modules it will be interesting to see if the UK medium-scale solar installation sector still manages to find good business despite the reduced subsidies, or if developers and land owners like farmers realise it makes more financial sense to invest in other technologies.

Solar industry in danger of provoking green backlash

"Cowboy" solar PV companies are undermining consumer confidence in the technology by mis-selling, and the industry is failing to police itself in a competent manner.

The sting operation by consumer magazine Which? and evidence from the small scale renewable industry's own self-regulating bodies shows that consumers are not adequately protected from bad practice.

The sting operation in which mystery shoppers got solar PV installers to estimate for a domestic system funded by Feed-in Tariffs found that three quarters of solar PV companies overestimated how much energy the PV modules would produce, and most underestimated how long it would take for the system to pay for itself.

One company overestimated profit by £4,275 over 25 years and underestimated the payback time by three years, compared to their expert’s calculations.

Seven out of the 12 salespeople even recommended installing solar PV panels on a shaded part of the roof. Eight companies didn’t question customers about how much energy they used.

Hard-sell approaches were being used: one company, Green Sun, gave the customer 24 hours to make a decision. Another, Skyline Solar, said their discounts were on a 'first come first served' basis.

Ten out of twelve companies failed to mention that the inverter would need to be replaced at a cost of around £1000 every ten years.

And half the companies tested, such as Anglian Home Improvements, sent sales people to make a technical assessment to provide the quote.

Unsupervised selling appeared to be the main cause of the mis-selling problem.

Which? advises consumers needing impartial advice to check the Energy Saving Trust website.

The consumer rights body is also calling for installation quotes never to be given on the basis of sales visits alone, always to include a site specific estimate and clear information on the life expectancy of equipment and cost of replacements, and the full cost (including scaffolding) of installation.

Which? did another operation last year on solar water heating companies and found similar levels of poor selling.

The importance of location

The Government’s building assessment rules, the Standard Assessment of Performance (SAP), are used to work out a PV system's energy output by installers. Yet Which? criticises this practice because they do not take into account the location of the property, which can seriously effect the output of the modules.

It therefore suggests revising MCS rules on energy performance prediction.

“It seems extraordinary that the Government’s rules require companies to ignore whether you live in Cornwall or Scotland when working out how long it’ll take to pay for the solar panels," said Richard Lloyd, Which? executive director.

In fact the only place in the country which gets enough sunshine to make the modules work financially without a subsidy is Cornwall.

However, SAP and EIR ratings are supposed to be unaffected by geographical location in order to make it possible to compare buildings throughout the UK.

Yet, given that a large part of a building's performance is based on solar gain - the amount of heat from the sun captured by the building - this is bound to depend on the building's specific location. Therefore there is a strong case for changing SAP requirements to provide a more accurate overall picture of the building's performance.

To determine a PV system's output, rather than relying on a SAP rating, which is laborious to undertake, it is easier to use the latitude of the location together with the amount of shading the site receives throughout the year.

The failure of industry self-regulation

The industry is supposedly already self-policed, firstly by the Microgeneration Certification Scheme (MCS), and secondly by the REAL Assurance Scheme Code, set up by the Renewable Energy Association - a case of the industry policing itself. This is a consumer code for suppliers of renewable and low carbon micro heat and power generators to domestic consumers.

Consumers can only obtain Feed-in Tariffs for systems installed by members of the MCS.

Which? wants MCS and REAL to better monitor and enforce rules, remove rogue traders from the MCS scheme and publish results of enforcement action on an annual basis.

The efficacy of such confidence-boosting measures is crucial because unless the public has confidence in these schemes then there will never be the mass roll-out of energy-saving measures which the Government is hoping for in the future under the Renewable Heat Incentive and the Green Deal.

"We take the allegations in this report very seriously, and they will be thoroughly investigated," Gideon Richards, Interim CEO of the MCS and MCS Steering Group Chair said in response to the Which? report. He has set up a meeting with their investigators to discuss their findings.

The REAL Code is backed by the Office of Fair Trading as part of its self-regulation initiative, the Consumer Codes Approval Scheme, and supposedly specifically bans false or misleading information.

Virginia Graham, Chief Executive of the REAL Assurance Scheme, commented, "It is particularly disappointing to see one of the companies offering a discount to consumers for signing on the day and another offering a discount in return for providing monitoring information. These practices are expressly outlawed in the Consumer Code and we will be referring these two companies to the Non-compliance Panel."

It took a consumer watchdog to do what both of these bodies are supposed to do themselves, but neither did.

A staggering 2,791 companies are now registered with the REAL code to install solar PV.

For this reason, "we have to work hard to ensure 100% compliance with the Code," says the REAL website.

Many of the requirements demanded by Which? are already in the REAL Code. Its self-auditing questionnaire for its members includes the question, 'Are the company’s procedures for calculating its performance estimates, financial savings and payback time correct?'.

REAL claims to employ mystery shoppers to inspect one in ten of its members each year, but on questioning could provide no substantive evidence of how effective this is.

REAL does log customer complaints, which can be lodged and viewed on its website, but without the naming and shaming of specific members.

They received 75 complaints last year and have had 70 so far this year. 48% of this year's complaints are about PV installations, 14% about solar thermal (down from 27% last year) and heat pumps are receiving 35% of complaints - three fifths of which are for ground source and two fifths for air source.

For solar PV, half the complaints are about high pressure sales techniques and a quarter about a delay in refunding a deposit. Other reasons for complaints include making exaggerated payback claims, and falsely claiming to be MCS certified.

Last year there was a similar Which? report on mis-selling by solar heating companies. And 40 websites of such companies were reported for making exaggerated or misleading claims about the financial or environmental performance of solar water heating systems.

At least twelve of these forty solar heating websites were claiming to be run by supposedly REAL Code compliant companies – who displayed the REAL Code logo on their website.

REAL's Consumer Guide urges consumers to use well-established companies and obtain multiple quotes.

Solarcentury, for example, has been in operation since 1999. Its CEO, Derry Newman, attempted to reassure the public by saying, "Currently our network consists of 25 companies, those we consider the highest quality solar installers in the country. Many have been established and working with us for a number of years, otherwise they have all undergone an audit to establish the robustness of their business operations from accounting through to install.”

Barry Johnston, Managing Director of Solar Twin Ltd., also called for revising the MCS rules on energy performance prediction in order to improve the quality of solar PV installations, as well as for solar thermal.

Both companies are calling for the rogue traders to be punished or disqualified so that the rest of the industry does not suffer. "The last thing we want is a backlash," said Newman.

The Feed-in Tariffs review fiasco

With a stroke, DECC has undermined the competitiveness of the UK solar industry in the export market.

Over 80% of respondents to the Government's review of Feed-in Tariffs opposed the deep cuts to the incentives with most calling for more modest cuts and for the retention of high levels of support for community-scale installations for schools, hospitals and offices.

Many investors are now changing their minds about supporting the industry.

The funding for Feed-in-Tariffs comes from everybody's electricity bills - estimated at an average £3 extra per bill by 2016. DECC's argument for the its U-turn on tariffs is that the £860m pot allocated for it cannot get any bigger because consumers would not tolerate the consequent higher bills, especially at a time when energy prices are rising anyway.

Its prime aim is to encourage awareness amongst the general public of the need to save energy and the importance of renewable energy rather than cost-effectively tackle climate change.


Putting solar panels on lots of homes is seen as the best way to do this. It wants to put the money from the FITs into the pockets of householders and not into the pockets of larger concerns.

It's a shame that this is an either-or alternative.

Because unfortunately, those large concerns are not just big companies but community groups and farmers, which flies in the face of the Government's localism agenda. It needs to make an exception in these cases and reinstate the higher tariff bands for PV.

But how successful is the policy at tackling the aim of reducing the country's carbon emissions? Pound for pound of investment, solar PV does not represent good value for money when seen from an environmental point of view in the UK when compared to some other technologies.

The UK does not get a lot of sunshine, except in the very south and south-west, the sun only shines some of the time, and so investment in technologies that can produce renewable and sustainable power all of the time more efficiently will therefore produce more carbon savings [see p. 40-44 of this CERT doc. for the supporting evidence that shows which domestic-level measures produce the most cost-effective savings].

This is where anaerobic digestion (AD) comes in. With a feedstock that can keep it generating every hour of the year, it is also an emerging technology that requires support to get it up and running. It may not be as sexy as PV modules, but it does the job.

The AD industry lobbied for much more support and has been devastated by the result. What it got was an increase in the FIT rates of just 1p. They are now 14p/kWh for schemes up to and including 250 kW and 13p/kWh for schemes up to and including 500 kW.

This is not nearly enough to stimulate further investment in the technology, as Lord Redesdale, chairman of the Anaerobic Digestion and Biogas Association (ADBA) has warned.

With a capital cost of around £7,745 per kWe, AD has the highest cost per MWh of any form of heating for district heating schemes - almost £250; twice the cost of a community biomass combined heat and power (CHP) plant. But put this in perspective: it is not as much as an energy-from-waste CHP plant.

And it has other benefits besides producing heat and power - such as discouraging N2O (a very potent greenhouse gas) emissions and nitrogen pollution by processing farm slurries, and the production of compost which can be sold for soil enrichment.

It is ideal for district heating. The main benefit of moving to district heating a declared Government aim - is saving carbon emissions. Here, anaerobic digestion CHP scores way higher than all other technologies, at around 5,100 kg of carbon dioxide per year compared to a conventional system. (Incidentally, air source heat pumps used for this purpose actually cost carbon compared to a conventional system.)

By the way, these figures are taken from a report commissioned by the Department of Energy and Climate Change itself two years ago on renewable heat and district heating networks.

So it is surprising to hear DECC's Greg Barker say that there is not enough evidence to support the industry's case for greater help.

Its own research shows that if you take into account the implied carbon abatement cost, anaerobic digestion actually ends up being one of the cheapest forms of renewable district heating at less than one fifth the cost of a community boiler using natural gas.

It is still not the cheapest by any means, but this is because the plant is doing more than just burning a feedstock, and because the technology is relatively new.

And the whole point of the Feed-in Tariffs and Renewable Heat Incentive is to bring down the cost over time.

The National Grid itself has said it can see a time in the not too distant future when up to 50% of the gas in the networks is renewable, much of it coming from anaerobic digestion of organic waste.

The Coalition Government is to publish a new anaerobic digestion strategy later this month. While this is not expected to include any more financial help, the more it can do to boost this potentially highly valuable technology, the better.

PV will be as cheap as grid electricity by 2015 in southern UK

The growing maturity of the renewables industry is indicated in a taster for an imminent report from the Intergovernmental Panel on Climate Change (IPCC) which looks at the growing deployment of different technologies and urges the continuation of stable policies to support changes in the energy system.

Speaking about the report, one of its authors, Sven Teske, predicts that parity for photovoltaics will occur by 2017. That is the point at which solar electricity is the same price as conventional electricity.

Prices have been coming down very fast recently, as the following table shows:

Module pricing per peak watt	unit	June 2010	May 2011	% reduction in 11 months
Europe	€/watt	4.13	2.69	65%
US	$/watt	4.23	3.07	73%
Lowest mono-crystalline module price	$/Wp	2.23	1.8	81%
	€/Wp	1.65	1.21	73%
Lowest multi-crystalline module price	$/Wp	1.74	1.84	106%
	€/Wp	1.29	1.23	95%
Lowest thin-film module price	$/Wp	1.76	1.37	78%
	€/Wp	1.3	0.92	71%

[source: solarbuzz.com]

Some countries - Spain, Italy, France and Germany - will reach grid parity by 2015. As for Britain, he predicts that this will occur in the southern part of the UK too, because it receives as much sunshine as the north of Germany.

But it won't happen in Scotland or Bulgaria, for example; in the first case there is not enough sunshine, and in the second case the price and the consumer reach is too low.

But Teske warns “if the PV industry wants to achieve a larger market penetration they need to be involved in storage, peak demand delivery and development of the smart grid".

Teske cautions that the renewable industry must watch out for very aggressive lobbying from nuclear power, gas and shale gas. He says, "in Spain, the gas lobby went straight for the renewables industry," and this may be partly why the feed in tariff for solar in that country was suddenly withdrawn with disastrous consequences.

Above all, a secure and lasting policy landscape is what is required.

Teske also says that the situation regarding concentrated solar power is fascinating. "If you added up all the announcements of concentrated solar power projects in Egypt, they would have 120% renewables already. What really counts are connected systems – not announcements – and there have been relatively few of those yet."

The Desertec project remains highly optimistic that it can find investors despite the political uncertainty in north Africa.

Turkey is another country that is, perhaps surprisingly, forging ahead with renewable energy with a new 100MW solar plant and with the intention of powering Antalya completely by solar power, and very good wind resources.

Solar PV and marine energy may be avoided by Green Investment Bank

Marine energy developers will have to wait until after 2015 before they can take advantage of finance from the Green Investment Bank, and solar power developers are currently confused about whether they will be able to use it at all.

The Department of Business, Innovation and Skills (BIS) has released a progress report on the principles under which the bank will be able to lend, citing a wide range of sectors including especially offshore wind, non-domestic energy efficiency and waste, but not mentioning solar PV.

The priorities are still being worked out, including whether domestic energy efficiency measures under the Green Deal will be eligible, since the Government wishes this to be primarily a private-sector led scheme.

But reading between the lines, it seems that the bank will be cautious, not proactive, in its lending, regarding itself not as a source of capital funding for projects whose profitability is some way into the future, but as venture capital for market-ready technologies.

BIS’s Vince Cable has been in disagreement with Chris Huhne at DECC over what the bank should finance, with Huhne arguing that horizon technologies such as marine and anaerobic digestion should be favoured.

It seems that Cable has largely won this tussle, especially since BIC will be the only shareholder of the bank - leaving DECC out of the picture in decisions over what will be financed.

Various groups immediately criticised this narrow remit, expressing, like regional renewable energy trade body Regen SW, that “for the bank to be truly effective it's important it doesn't take the simple option of investing in safe projects that would simply compete with bank finance."

Its chief executive Merlin Hyman added, "It must focus on leveraging the required private capital by financing commercially-viable projects at the earliest stages, where the highest risks are inherent."

Manufacturers’ organisation EEF demanded more detail on the type of projects that would be eligible for funding from the bank. Tony Sarginson, its North-east regional manager, said: “The big question of what will be its funding priorities is yet to be answered."

But BIS says the bank's operating principles will include making a significant environmental impact as well as financial returns; operational independence from Government; partnership with the private sector, and the minimisation of market distortions.

The bank will evolve as follows: from April next year, subject to state aid approval, the Government will be able to make direct financial investments is self to priority projects. After this, when the bank is a stand-alone institution, it will lend according to the criteria in the document published by BIS this week.

Following April 2015, it will be able to borrow money, assuming public sector net debt is falling as a percentage of GDP, and therefore radically increase its activity. But what if it is not?

Wind power, particularly offshore wind, nuclear, transmission networks, energy efficiency and waste are cited as being particularly urgent, although nuclear is not seen as particularly relevant to the remit of the bank, whereas the provision of rolling stock and marine energy are.

If the bank does lend to nuclear operators then a close watch has to be kept that there are no further liabilities for taxpayers.

In the area of waste management, novel technologies such as anaerobic digestion could be an opportunity for the bank.

BIS does to its credit point up the importance of energy efficiency, saying “many users are unaware of the potential savings or how to capture them and therefore invest less than the optimal amount in upgrades or building fabric, fittings, plant and machinery", so sees a role for the bank in promoting this.

Wales' new solar, heat pump, building tech centre

A £6.5 million project to investigate and produce the next generation of low carbon whole building solutions has been opened in north Wales.

The Sustainable Building Envelope Centre (SBEC) at Shotton, Deeside, is a partnership between the Low Carbon Research Institute (LCRI), Tata Steel and the Welsh Assembly Government which over three years will research and monitor solar thermal and photovoltaic technologies and their use together.

Various combinations of technologies will be evaluated, and the solutions arrived at will be relevant not only for new-build, but also for retrofit of large public, industrial or office structures.


The SBEC's director, structural engineer Daniel Pillai, says that the focus on the building envelope (external and internal roofs and walls) is important because it has the potential to play a far more proactive role during a building's life, and provide sources of renewable energy.

"Naturally," he says, "since one partner is Tata Steel, the solution will involve this material, but this focus is far from exclusive. We are looking at a variety of ways in which the envelope can capture, store and release energy."

Transpired solar collectors

Tata bought Corus Steel in 2010. One of the products Corus had developed and which the SBEC is researching is a transpired solar collector (TSC). This involves an equator-facing wall clad with steel that is coated with special solar absorbing paint. The cladding, mounted a few inches from the wall, is perforated with thousands of tiny holes.

The sun heats up the metal, and fans at the top of the gap draw up the heated air into a Heating, Ventilation and Air Conditioning (HVAC) system with heat recovery. Ducting transmits the heated air around the building.

"The building has four environmental chambers," Pillai explains, "with which we can experiment with different combinations using the TSCs. One is a workshop, where the system includes fan driven air heaters, and we expect the TSCs to contribute about half of the heating requirement, supplementing gas blowers.

"The upper floors and ceilings are made of concrete mixed with a powder called Micronal. Made by BASF, these are tiny capsules containing wax, a phase change material, which melts at 23o, absorbing surplus heat from the room," Pillai continues. "At night when the room cools, the wax solidifies and releases the heat, stabilising the internal temperature."

A new take on air source heat pumps

"The other three chambers are office areas, with variations on a theme," he adds. "Air source heat pumps will boost the pre-heated air from the TSCs and send it to underfloor heating. They can also work backwards in the summer to cool the building."

Air source heat pumps have come under some criticism lately for not being sufficiently efficient to warrant use. But the SBEC hopes that using solar pre-heated air will improve their performance, and will be checking this.

Later in the project they will be investigating other means of cooling buildings, perhaps using solar thermal heat engines to drive adsorption chillers.

Pillai says that the building will undergo blower tests in a couple of weeks to test their airtightness, which he hopes will be under 3m2/hr, but they are not aiming for the Passivhaus standard, which is one third of that level.

Embodied carbon

The insulation around the building includes polystyrene and mineral wool, the former of which has high embodied energy. I asked him whether the project will examine the embodied carbon in the materials and products used. Pillai responded positively.

"Absolutely. This is one of the unknowns in the field at the moment, and can be quite controversial. So we hope to work with as many people as possible to get reliable figures on how much energy is used to make the products, so we can choose the most efficient."

Steel is usually associated with high embodied energy, but Pillai counters that because much steel is recycled this need not be so.

Pillai said the collaborative approach extends to all the SBEC's work and invites potential partners. "We want to work with industry and customers to find the best solutions that are easy to install," he said.

SBEC has been designed by the Design Research Unit of the Welsh School of Architecture (WSA).

The Low Carbon Research Institute, housed in the building, is a team of 18 people drawn from Tata Steel, LCRI, Welsh School of Architecture and other industry specialists, partly funded by the Higher Education Funding Council For Wales (HEFCW) and £34m from the Welsh European Funding Office (WEFO).

Their work includes developing pre-finished steel products that deliver efficient energy functionality, and turning them into roof and wall components that will work on all building types. They're also R&D-ing PV, marine, hydrogen and other low carbon technologies.

Dye-sensitised PV

An additional and connected centre, the PV Accelerator Centre is developing a photovoltaic pre-finished steel product and its manufacturing process. It is using the next generation of dye-sensitised PV technology, which works on a principle similar to photosynthesis in plants.

This product performs well in all light conditions and will hopefully make solar electricity much cheaper and easier to use. This £11m project has operated jointly with Australian company Dyesol, funded by £5m from the Welsh Assembly Government.

Anaerobic digestion - renewable heat, electricity, waste disposal and fertiliser production!

When people think of renewable energy they think mostly of wind power and photovoltaics. Any discussion of renewable electricity policy tends to refer to these and criticise them, and by implication all renewable energy, because they are unpredictable and variable and need backup.

There is an astonishing ignorance even at high government level over the potential of other kinds of renewable power generation. So I want to redress this balance with occasional posts looking at different technologies. Recent posts have referred to marine current turbines, for example.

This post is about the unsexily named anaerobic digestion. Mostly it's about small, farm-scale versions, and I hope to get around to talking about larger scale ones soon.

However, it's worth mentioning right up front that larger plants are able to produce gas for the mains and for vehicles running on gas.

A chief worry if we don't rely on nuclear power, is where will all the power come from to decarbonise transport? Well, here's one answer.

A new income stream - and more - for farmers

A survey last December found that 80% of farmers in the UK wanted to have solar photovoltaics on their roofs within the next three years - and yet the fact is, that in terms of the carbon saving and other benefits anaerobic digestion (AD) provides better value for money than solar PV.

For example, farmer Clive Pugh (above) at Bank Farm, Mellington, near Churchstoke, Wales, put in his first AD plant 20 years ago. He now has a state-of-the-art, three chamber unit that provides all of the farm's own energy needs, and that for two homes and the farm dairy, as well as generating an income of up to £10,000 a month from supplying the National Grid - without the new FiTs subsidy, because he was an 'early adopter' and so the scheme is excluded from it.

“We initially went for an anaerobic set-up because we needed a new slurry store and it was something we had been looking into for some years,” says Mr Pugh.

“It revolves around using the slurry from our 140-cow dairy herd. In order to keep the gas production fairly constant throughout the year, we also use poultry manure, silage effluent, waste silage, discarded milk and whatever other green waste we can get hold of.”

While 10 cows are needed to produce 1kw of energy, in fertiliser value terms 1,000 gallons of separated liquid will provide around 30 units of nitrogen, 40 units of potash and 12 units of phosphate.

“The quality of our grass is certainly most noticeable these days, and our need for phosphate and potash is now nil. We also only need top-up units of nitrogen depending on the type of crops being grown,” says Mr Pugh.

How does it work?

In a typical plant, vats ferment farm slurry and crop waste (and can also process food waste) in the absence of oxygen to produce gas which can be used to generate heat and power.



The facility would normally be owned and operated by the farmer/farm business, but might sometimes be part of a co-operative venture. They often would not be approved to accept animal by-products at this scale.

The biogas produced in AD is a mixture of methane (65%) and carbon dioxide (35%) which can be used to generate heat through a boiler, or heat and power through a combined heat and power (CHP) system. In addition, following further processing, biogas is also a suitable fuel source for vehicles.

Hot water may be used on site, for example to heat polytunnels or greenhouses for market gardening. Some farms use AD to power a generator for the digester and pasteurisation. Other benefits include:

• it avoids landfilling of organic wastes;
• the biogas can be burnt as a fuel;
• there is a reduction in the use of fossil fuels, offsetting carbon dioxide emissions;
• it is a predictable and reliable source of electricity and energy, unlike wind power and PV;
• the digestate products return nutrients to the land, reducing dependence on inorganic fertilisers;
• there are economic benefits from reduced fuel and fertiliser use, as well as the subsidy;
• farms can become more self-sufficient, with socio-economic opportunities, e.g., gate fees can be charged for waste taken in and electricity, biogas, fertiliser and soil conditioner can be sold;
• odour is reduced by around 80% compared to farm slurry;
• methane (a greenhouse gas) emissions are reduced;
• a range of organic waste materials can be processed - the highest gas yields come from the co-digestion of fatty (food processing wastes), liquid wastes (animal slurries) and green wastes;
• the amount of farm slurry sprayed onto farmland - and of run-off and pollution of waterways - is reduced;
• harmful bacteria and viruses are destroyed, reducing the spread of harmful disease causing pathogens.

The energy generating potential is determined by the size of the digester and waste feedstock composition.

A typical farm installation might be up to 0.5MW. A small farm using farm waste can produce enough heat to warm the digester and meet domestic heating requirements. If electricity is generated through CHP of 10kWe capacity, enough electrical energy could be generated to supply up to 13 homes.

A brand new installation can cost anything from £150,000 for a fairly basic liquid-only unit to more than £375,000 for an all-embracing 120 kw producing version.

Better payback than PV

This high initial cost is why the technology needs support at this stage. Without support, simple economic payback is approximately 20 years.

Factoring in savings made in waste disposal, according to the Carbon Trust, mean that payback times for installations tend to be under 5 years.

Compare this to solar PV in much of the UK, which is 40 to 60 years without subsidy.

Larger plants

A range of AD scales exists, from single on-farm digesters through to large centralised anaerobic digesters (CAD) collecting waste from a larger surrounding area.

These CADs will usually accept animal by-product wastes for digestion. The gas produced at this scale can also be used for other purposes, for example to power vehicles or be injected into the National Grid.

AD at this scale is economically viable and requires little support. Most plants operate as co-digestion plants with slurries, in additional to wastes from the food, brewing and other industries.

This recent post contains other examples.

This website is a useful source of further information, although slightly out of date.

In Germany there are more than 3,000 on-farm anaerobic digesters - in the UK perhaps around 50.

Anaerobic digestion wins in Feed-in Tariff review

The government is recommending increased support for farm-scale anaerobic digestion (AD) at the expense of “solar farms" over 50kW, in an effort to maximise the benefit of limited resources.

This is a good thing as the technology has numerous advantages over PV - including reliability - which I'm outlining in a subsequent post this morning.

The new consultation follows the launch in February of the fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW. This followed evidence of 169 MW of large scale solar capacity in the planning system - equivalent to funding solar modules on the roofs of around 50,000 homes if tariffs are left unchanged.

The government feels that leaving this unchanged would soak up most of the subsidy that would otherwise go to smaller schemes or other technologies. Such a development was not envisaged at the start of the programme.

The consultation also recommends increasing support for farm-scale AD, as it has received disappointing uptake so far. The heat component of AD is also supported through the Renewable Heat Incentive (RHI). This means that where the biogas is burnt to produce heat and power AD is eligible both for the RHI and FITs.

It could be argued that it doesn't matter where the PV modules are as long as they are generating electricity. But the government's concern is that PV be available to ordinary people and not big business.

Greg Barker, Climate Change Minister said: “I want to make sure that we... allow even more homes to benefit from feed in tariffs... and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers."

Installations larger than 50 kW will receive support as follows:

• 19p/kWh for 50kW to 150kW
• 15p/kWh for 150kW to 250kW
• 8.5p/kWh for 250kW to 5MW and stand-alone installations.

These compare with the tariffs that would otherwise apply from 1 April of:

• 32.9p/kWh for 10kw to 100kw
• 30.7/kWh for 100kw to 5MW and stand-alone installations.

These reductions are comparable to those in schemes in Germany, France and Spain, where tariffs for PV have been reduced sharply over the past year.

The new increased tariffs for AD, designed to make them more attractive, are:

• 14p/kWh for installations up to 250kW
• 13p/kWh for installations from 250kW to 500kW.

These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500kW. The tariff level set for biomethane injection into the gas grid under the RHI and also for small scale - below 200 kilowatt thermal (kWth) – combustion of the biogas produced by AD is 6.5 pence per kilowatt-hour of heat generated.

The idea is specifically to increase the energy obtained from waste through anaerobic digestion, not to promote energy crops, particularly where these might be grown instead of food crops. DECC is in discussions with Defra and others about ways to ensure this does not happen.

Subject to the outcome of the consultation and parliamentary scrutiny, the revised tariffs would be introduced from 1st August 2011.

Over 27,000 installations have been registered for the FIT scheme to date.