A recent survey by LG Solar reported in Solar Power Portal suggested that cuts to the feed-in tariff were responsible for the local government sector not progressing solar PV projects as soon as they might have done. Whilst the statistics in this report may be accurate, the conclusions to be drawn from this are more complex than that.
The report showed that almost half of the 332 respondents claimed that reduced subsidies have meant that it is difficult to invest in solar PV at the current time. It went on to claim that this has resulted in 70% of those authorities having no strategy in place to invest in solar for the foreseeable future. However, it is interesting to note that a whopping 84% already have some solar panels fitted and so this does not indicate a prejudice against solar PV.
One of the difficulties here is that many local authorities in the past few years undertook very small, pilot projects in solar PV, not because they believed in the technology or what it would offer them, but because there was a quick buck to be made, due to the feed-in tariffs. As everyone in the industry knows, such projects are not representative of proper investment in solar PV.
In our consultancy work, we always encourage a full strategic approach to any project. There is no point in having a number of eclectic projects that don’t add up in any strategic way and generous FiT rates blurred this picture and encouraged poor practice.
Cornwall Council’s solar farm is a good example of how it should be done. The solar farm provides valuable income to the council. However, the private wire arrangement also provides electricity to the council owned airport next door and so helps reduce the costs of one of the major lifelines to the peninsula (particularly important when the rail link was down). Next door is land zoned for economic development and the intention was to offer cheap energy from renewable sources to those businesses relocating to Cornwall. So the solar farm can be used as a tool of economic development too. And if the electricity charges up the council’s fleet of EVs, then it is contributing to its transport and carbon policies as well. This is the sort of joined up thinking that is required.
But as I said, generous FiT rates meant that this approach was seen to be unnecessary in some authorities. It is those that have given up. Largely because they were never in the game anyway.
The smarter authorities are still very much in support of solar PV. Whilst the economics for solar farms do not currently add up until panel prices fall further, schemes will work where there is a commercial enterprise to purchase the electricity via a private wire or by sleeving. Establishing an ESCO is another way to make the finances add up, thereby permitting sale to the public at full retail rates.
Solar PV on civic buildings has continued to provide excellent returns, as most authorities are paying at least 10 pence per kWh for their power and the saving equates to a FiT rate anyway. Car park projects are booming, where a pre-existing asset can be taken, improved and a further layer of income created off the top.
The high FiT rates are never going to return and so it serves no purpose to hark on about them. The real issue is how we can persuade those authorities that have not really understood the economics of solar PV in the past to re-enter the game on the correct basis, focussing on the ways that good projects can be put together at the present time. This is one of the things that APSE Energy has tried to do in its publication: Investing in Electricity: saving costs and generating income for local authorities, where a number of strategies are offered.
One of the areas that we are focussing on is trying to spread the message to other councils that solar PV schemes do still work and trying to draw the focus off the past and on to the present and the future. Those are the only areas that we can influence.
So my message to those authorities that have taken their bat and ball home is that they are missing some great opportunities and with the current climate in local government finance, councils need all the income streams that they can get.
