02 Nov 2017
Some people, including political leaders, believe that environmental levies add cost to our annual energy bills, subsidising the construction of expensive wind and solar farms, making energy unaffordable for millions of people. Sadly, these people are being mislead, influenced by the large energy suppliers, like British Gas who recently blamed environmental taxes for their most recent price hikes.
The misinformation spoon fed to politicians by those whose interests lie in the preservation of a fossil fuel based energy industry is consumed blindly by our politicians who are overwhelmed by the amount of data that they must process to keep up to date. The energy industry seems to be an area in which most politicians are especially uninformed, or worse, deceived. Consumers are just concerned about rising energy prices, accepting the information given to them by energy suppliers trying to keep their customers.
The truth is that fossil fuel energy is subsidised at a much higher rate, more than two thirds higher, than renewable energy. These subsidies are funded directly by the taxpayer, through tax credits to the shale gas exploration companies or tax breaks on investment of oil drilling and refining equipment. Since tax breaks are not transported directly to our energy bills, they are less obvious to consumers. Other subsidies funded by the taxpayer are embedded in departmental budgets, like the billions per year spent to maintain our nuclear power infrastructure is embedded in the budget of the department of Business and Industrial Strategy. Direct funding of activities by the taxpayer allows for the activities to take place outside of public scrutiny.
Tax breaks for fossil fuels are funded by the taxpayer, investments in the renewable energy infrastructure that we need to ensure affordable and long lasting sources of energy for the future are funded by the bill payer. There are many arguments that can be supported economically, that investments in renewable energy like wind and solar, pay back over the life of the energy generation because we don’t have to pay for the cost of the fuel, it is free. The cost of the fuel incorporates the exploration cost, drilling cost transport cost of these fossilised relics we use for “cheap energy”. If the taxpayer funded our renewable energy infrastructure, by diverting less tax breaks to the fossil fuel industry and funding clean energy, our energy bills would also decline, there would be no need for ‘eco taxes’.
The truth is that for years onshore wind has been the cheapest form of energy, yet development of onshore wind generation has been discouraged by this government. In June, 24% of the electricity in the UK was produced by solar panels. 800,000 homes have solar panels on their roofs and 200,000 have solar thermal hot water. Just recently, the price of electricity from offshore wind was trading at half the price of electricity from new nuclear power on the capacity market. It is time to stop the distorted, misinformed news on renewable energy and to hold our politicians accountable for supporting the construction of more renewable energy in our communities.
We can work together to ensure that we have affordable heat and electricity into the future and stop listening to the propoganda on Eco Tax, or that the lights will go out without expensive new nuclear. Battery storage is creating the reliability we need into renewable energy, eliminating the need for base load power.
Now is the time to support your local community energy group, to get behind the movement for local energy and stop accepting the highly selective news intended to manipulate public opinion coming from the media as our truth. We can create a cleaner, safer world for our children if that is what we choose to do.
15 Oct 2015
In the past few months, we have seen some challenging developments in the renewable energy sector. Two key announcements from the Government have stripped away the stabilising wheels for clean energy, removing some of the incentives on which the industry has relied, making it harder to progress. The reasons were effectively that prices for renewable energy has come down as to no longer require the same level of subsidy that it did five years ago.
The first announcement came in July 2015, when HMRC proclaimed that renewable electricity would lose its exemption to the Climate Change Levy, a tax on the supply of commodities to businesses. Renewables have been exempt from this charge since is was introduced in 2001, providing a subsidy for low margin investments in renewable generation.
The reason given for this change is to “correct an imbalance in the tax system by preventing taxpayer’s money benefitting renewable electricity generated overseas”. However, this logic is refuted by industry insiders who argue that more than 70% of the Levy Exemption Certificates went to UK providers. The removal of this tax exemption could mean a drop in income for some renewable schemes of between 5-6%. Although this may not sound like much, this could mean the difference between sink or swim for some smaller companies, as Dr Gordon Edge of RenewableUK explains:
“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables”
The great irony is that because the renewable industry is nearing price-parity with fossil fuels, and because the Government wants to ensure low energy prices for hard-working families, the requirement of clean energy generators to pay toward the Climate Change Levy will lower their profit margins, meaning they will need to raise prices in order to compensate.
The second measure affecting the renewables industry came from the Department of Energy & Climate Change (DECC), when it announced on 22 July 2015 that it would be removing preliminary accreditation from the Feed-in-Tariff. Pre-Accreditation means giving green energy generators a guaranteed tariff level in advance of a project being commissioned, which is vital for financial modelling and creating investment offers. Removing this guarantee means that energy providers would receive the tariff rate as at the date they apply for full accreditation. In the DECC’s own words, “this will mean that a developer will not be certain of the level of suport they will receive under the scheme until the point at which their application is received by Ofgem”.
According to the DECC, pre-accreditation was introduced to “remove a large degree of risk” and to “offer greater certainty to industry”. The table below illustrates the huge increase of installations deployed under the FiT pre-accreditation scheme since it was introduced in 2012:
So what could be the reason for removing such a successful incentive now? The rationale provided by Amber Rudd, minister of DECC, is that there has been a much greater uptake in renewable energy projects than was forecast. Predictions had been for approximately 750,000 new renewable installations nationwide between 2010-2020, whereas the reality is that there have already been 700,000 installations as of 2015. This has “significantly outstripped expectations”, meaning that budget forecasts for 2020 are no longer workable.
It makes no sense that at the same time we’re told climate change is the fight of our generation, we are being also being told that the UK cannot afford the present pace of renewable growth. Or that energy security is a big national priority, then stop the support for the one area that provides it. It is tragic that just as renewables are challenging fossil fuels for market dominance, their progress has been curtailed. The irony of the green industry being punished for exceeding expectations is absurd, especially at a time when financial incentives for fracking are are on the rise. As David Attenborough said in his recent interview with Barack Obama, to transition to a low-carbon economy all we need to do is make renewables cheaper than fossil fuels, and common sense market mechanisms will do the rest.
However, there is cause for optimism. Given the tremendous advances in the efficiency of renewable technology, as well as the recent growth of solar power in the UK, perhaps Amber Rudd and DECC are right; perhaps the renewable industry is resilient enough to ride without support. And the decision to cut the Feed-in-Tariff has not yet been settled either, with consultations underway (please complete this one by 10:10 here), so if you do feel this is wrong, contact your MP and let them know.
Moreover, even without the subsidies of the past, there are still enormous opportunities to lower our energy bills as well as carbon emissions through energy efficiency measures, such as insulation, draught-proofing, or double glazing.
If the recent developments in the renewable industry have highlighted one thing, its that communities cannot rely on fluctuating external factors if they desire a stable and fair energy supply. To defend our communities against such unexpected changes in the future, we need to take control of our own energy networks, which will ensure resilience and price stability.
And what’s more, we will not be penalised for our successes.
03 Jul 2014
The UK may have experienced one of the warmest Junes on record, according to initial statistics from the Met Office National Climate Information Centre. It is therefore unsurprising that the UK’s use and generation of renewable energy has increased this year, as reported by The Independent, Green Peace’s Energy Desk and Edie Energy. The Guardian also reported that the UK’s sunny weather boosted solar power generation, providing an estimated 7.8% of the UK’s electricity in daylight hours of solstice. Additionally this year the Solar Trade association (STA) has estimated that the capacity of solar generated from homes, building and solar farms has risen from 2.7GW in July 2013 to 4.7GW (the equivalent of 3 new nuclear power reactors) in June 2014.
At the weekend I was out with a friend, who spotted a solar panel on a roof; it was force of habit that I corrected her, what she pointed at was actually a solar water heating system. So what is the difference and how can you tell?
What is a solar PV panel?
Solar photovoltaic (PV) panels capture the suns energy to produce electricity using cells comprised primarily of silicon semiconductors; photo meaning ‘light’ and voltaic meaning ‘electricity’. These cells, arranged in layers on a panel, convert sunlight directly into electricity. This arrangement looks like the panel is made up of squares. When sunlight shines on the cell an electric field is created: the stronger the sunshine the more electricity is produced. The solar panels may be roof mounted on a frame, ground mounted or even incorporated into solar tiles as show in the picture above. The generation power of a PV panel is measured in kilowatts peak (kWp), it’s the rate at which it generates energy at peak performance in full direct sunlight during the summer. Although the technology is relatively easy to understand, the economics of solar PV are complicated, involving cost, output and quality control.
What is a solar water heating system?
A solar water heating system is a type of solar panel used for heating water. It is called a collector and like a solar PV panel can be roof mounted. Solar heat is collected and used to heat up water which is stored in a hot water cylinder. Water is the best means of storing energy. The water that passes through the wall mounted tubes is not the water that pours out the tap, these pipes are separated in the cylinder and in the heating system. The hot water can also be run through pipes under the floor, creating radiating heat, improving the thermal comfort of a space.
There are two types of solar water heating panels:
- Evacuated tubes: these are more distinctive as you can see the tubes which make up the panel, through which the water passes (photo 1).
- Flat plate collectors: these can be fixed on the roof tiles or integrated into the roof. This can give a neater look – similar to Velux windows – and saves money on other roofing materials (photo 2).
Evacuated-tube collectors have a higher efficiency than flat-plate collectors, so they may be a good option if you only have a small area of space. The most important aspect of choosing a solar thermal system is the use of the heat in the summertime.
Using solar power to generate electricity or to heat water is beneficial because it is a renewable source, unlike fossil fuels such as coal, oil and gas which are finite resources that will eventually run out. Electricity or heat generated from sunlight can be used all around your home or business; it doesn’t produce harmful greenhouse gas emissions such as carbon dioxide (CO2) and there is no impact on the environment. Utility bills will also be reduced as installing the renewable initiatives will reduce your reliance on mains power. Your roof can become a valuable asset, generating electricity and heat for your property at little running cost. In fact, as fossil fuel prices increase, solar will become more commonplace, as people take advantage of generating their own energy at less cost.
Installing solar panels in your home or business:
Solar panels for electricity or a solar water heating system can be mounted on sloping and flat roofs, ideally south facing (can also be east/west). Solar panels can be expensive to install, although prices have halved in the last two years. BHESCo offers a Pay As You Save model whereby we can install an initiative in your home or business for no upfront cost. You buy the electricity or heat generated by the system we install for a discounted tariff. This saves you money immediately, helping you to transition to your own energy generation once the agreement is paid off. Find out more about BHESCO’s Pay As You Save model. You can also find out more about the benefits, costs, savings and maintenance of solar PV panels on the energy saving trust website.
Finally let’s face up to those myths about solar PV and solar thermal panels!
Myth: Solar panels don’t work when it’s cloudy
Incorrect! Solar PV and solar water heating systems don’t need direct sunlight to generate electricity or heat, then can still generate in cloudy or overcast weather. Cloudy weather reduces the generating capacity of solar PV by approximately 50%, in comparison to direct sunlight. However this is still a valid, and most importantly renewable, way of generating electricity. Not convinced? Germany is the world’s leading solar power producer producing half of their electricity demand from solar power in June 2014 and they have a comparable climate to the UK. If they can do it so can we!
Myth: Panels mounted on my roof will cause damage.
Incorrect! Panels attach to rails which fix onto brackets. On a tiled roof, these pass under the tiles and fix to the rafters in the roof. This method of mounting solar panels is very secure and provides distribution of the load. Some tiles will need to be removed in order to attach the brackets but the installer will replace these after the bracket has been attached. Depending on the tile shape and size, it may be necessary to make a small groove in the overlaying tile. Panels can be mounted on most roofs regardless of type. Make sure you completely understand the works that the installer intends to undertake.
Myth: I won’t be able to insure my house with panels on the roof
Incorrect! As a general rule insurers will include solar PV and solar thermal panels in overall home insurance. Here is what Aviva and Churchill say:
Aviva: ‘Our home insurance will automatically cover solar panels as part of its standard buildings policy. Customers just need make sure they include the value of the Solar Panels in the overall sum insured’.
Churchill: ‘You do not need to tell us if you have or are having Solar panels fitted to your property. Loss of, or damage to solar panels would be covered under the Buildings section of our Home Insurance policy so it is important that you ensure that the Buildings sums insured is adequate to include the replacement cost of such items’.
Myth: I need to get planning permission to install panels
Incorrect! In most cases planning permission is not needed as PV and solar thermal panels are silent in operation and visually. However if you live in a listed building, or within a conservation area, you should check with your local council.
Myth: Having solar solar panels on house will reduce its value.
Incorrect! As the panels are generating energy for free, reducing energy bills of the property, this will not decrease the value of your home. Moreover the value today of the energy generated over the life of the panels, can be quantified and incorporated in the value of the property. If an income is received from the Feed In Tariff (FIT), the new homeowner could receive an income.
Another myth? Let us know and we’ll tell you if it’s true or not!
If you have any questions about solar panels, solar thermal, renewable energy generation or the Pay As You Save model please get in touch with us to find out more.