FiTs for Solar PV in UK are not cost-effective for tackling climate change
Yes it’s true, last night when I was speaking at the BUST (Bristol University Sustainability Team) event, I said that Feed-in Tariffs (FiTs) for solar PV in the UK are not a cost-effective way to tackle climate change. If we consider the cost to reduce 1 tonne of CO2 using solar PV in the UK it is more than 10 times higher than some of the other technologies. A couple of years ago I was involved in working out how Exmoor National Park could become carbon neutral; as part of that we looked at the cost to reduce 1 tonne of CO2 using the different technologies and energy efficiency measures available. Most of them, including heat pumps (with a good coefficient of performance), wood and wind came in at less than £100/tonne of CO2 avoided. Solar PV came out at £900 to avoid 1 tonne of CO2. This figure has undoubtedly been reduced since the introduction of FiT with the number of installations exceeding expectations. We can quibble about the numbers and tweak the margins but solar PV cannot be considered a cost-effective way to tackle climate change. But does that matter?
This does not mean that I am against FiTs for PV, in fact at TCW we have been supporting community groups who want to install community PV systems and are ready to launch share offers to raise the capital needed. FiTs for PV are undoubtedly one of the most successful tools for engaging communities and individuals in the energy agenda. PV is quick and easy to install and with the subsidy as a hook, communities and individuals have engaged like never before. This is to be encouraged and could be the most cost-effective policy yet to engage the wider public. So for that reason FiTs for PV are important and, it might be argued, essential but not on their own. Research by other groups has shown that the future of energy in the UK has to be a mix of different technologies and solar PV will be a part of this mix (albeit a small one).
Lord Stern in his Economics of Climate Change said we must reduce emissions, wherever and however it is cheapest to do so, so FiTs for PV should be seen as tool for engaging but we must bring other, more cost-effective solutions alongside it to really deliver on climate change. At TCW we have launched a green loan to install two more wind turbines in India, the cost to reduce 1 tonne of CO2 is less than £20 and the lender earns 6%.The surplus (profit) is used to support environmental and social projects in UK and Indian communities, including renewable energy projects. Buzzbnk.org/tcw
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Comments
All Very True. Wind is a better EROI and burning the (wood) furniture is cheaper. Solar water heating and reduction in use are all more cost effective.Research needs to be directed at reducing the energy and environmental cost of solar by an order of magnitude (to make it sustainable)really , but Solar IS silent, and it DOES glitter.
As you say, we can quibble about the numbers and indeed the cost of PV has reduced markedly recently.The aspect that you have missed is the application of technology. One of the reasons PV has been so successful (aside from the strong FIT) is that 1. It produced electricity - high grade energy that can be exported easily and 2. It can be applied to a very large percentage of situations.By contrast, heat pumps, biomass, solar thermal, wind, and hydro are more limited (in order) by existing building thermal properties, size of building, energy use, planning, and lack of resource.I have always made it clear that PV has the lowest yield per £, but that does not make it irrelevant.
Dear Carl,Many thanks for your comments. I agree, it is the ease of applicability that makes it so accessible and therefore excellent as an engagement tool and for getting more RE in the 'ground'. We need everything and I would not consider PV irrelevant. As part of the mix I would say the recent FiT has been essential to raise the whole energy question in the consciousness of many - we need more and much more quickly. My concern is only, that if we promote this as a way to tackle climate change, not only is it not cost effective but it gives ammunition to those that want a reason not to support RE at all.
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