This week, another dispute has broken out between environmentalists in the UK, this time primarily between George Monbiot, journalist and author, and Jeremy Leggett of the company Solar Century, over whether it is sensible to offer householders in the UK large subsidies to install solar photovoltaic (PV) panels.
The UK government has decided that it will. From April, householders who install PV will receive large subsidies through a Feed-in Tariff (FiT). The FiT approach is better, if starting from scratch, than the UK approach for large renewables, the Renewables Obligation. (FiT is similar to the US net metering approach, and the Renewables Obligation similar to Renewable Portfolio Standards). However, endless debate about which is better and whether an existing regulatory framework should be replaced by a different one – which we have had in the UK ever since the Renewables Obligation was introduced – introduces regulatory uncertainty and so increases the cost of capital for those wanting to develop renewables at large scale. Therefore, the UK government decided, sensibly, to have both: a FiT for small scale (up to 5Mw) and the Renewable Obligation for above 5Mw. Many leading US states, including California, combine the two.
However, the UK government is also introducing a very large tariff for PV – 41 pence per kilowatt hour, much higher than for any other form of renewables. This is not sensible. The UK is quite northerly and the sunshine, even when it arrives, is not particularly strong. It should be used for heating water, in a system called solar thermal. The government is also supporting this through a Renewable Heat Incentive, which is a similar approach to a FiT, but which will come into force in April 2011, not April 2010.
Supporters of the German approach to solar point out that this country has become one of the solar world leaders. So it has. However, as Monbiot says (see Monbiot.com: The German Disease), in 2008 solar still contributed only 0.6% of total German electricity and the cost was €35 billion. This money was raised by increasing the tariff to all electricity users. In climate terms, it is desirable to increase the cost of electricity to commercial users, so office lights are not left on all night. However, increasing domestic electricity costs hits the poor hard, particularly those who do not live on the gas grid and so have to use electricity for heating. This is less of a problem in Germany, which is a more equal society with some effective energy efficiency schemes, than it will be in the UK. The UK PV tariffs will transfer money from the poor to those wealthy enough to invest in PV.
Some also argue that enabling people to generate their own electricity is a good way to get them to use energy more sensibly and efficiently. This sounds plausible, but I have yet to find an evaluation of where and if this has actually happened. I will continue research on this and, if I find a good evaluation, I will report on it in a future editorial. However, my view at the moment is that the cost of subsidising PV in the UK (as in Germany) is not justified by the benefits, including any behavioural change.
This does not mean that PV is a bad technology. It is highly suitable in countries nearer the equator. Spain has done well on solar, though it only got 1.6% of its electricity this way in 2007. Italy should follow Spain’s example (see Italy must lead energy efficiency and renewable production worldwide), using both PV and concentrated solar power. It obviously makes even more sense in the Sahara and where there is no electricity grid. That is why Climate Answers is spending £4,000 on solar panels for schools in Niger. These are now being ordered and should be installed before the summer. In the autumn, I am planning to visit these schools, to see how it is working out and how else we can help.
I am also getting involved in a charity which installs renewables in the developing world, the Koru Foundation, which:
“… works with communities in Africa, Asia, Latin America and the Pacific region to improve their quality of life through installing renewable energy systems which provide sustainable energy to power homes and local services.”
They have operating schemes in Uganda (solar lamps), Mozambique (micro-hydro), Nicaragua (wind-solar hybrid), Peru (micro-hydro) and Nepal (micro-wind). It is a team of just four people, so administration costs are low, but they do thorough evaluations of how well each scheme they support performs, so this seems an excellent recipient for anyone wishing to donate money to support both climate control and economic development.
The other relevant programme I am involved in aims to help rural Indians get solar panels, solar cookers and other small-scale renewables (see 7 August 2009: India sets out dramatic solar plans). Most rural Indians do not get electricity from the grid , and most use firewood for cooking, with consequent damage to forests and often very dangerous levels of indoor air pollution. We are trying to raise enough money to start a fund to bring renewable energy to five million Indian households by 2015. We almost have enough, but not quite. I hope that Climate Answers will soon be able to report on significant progress with this.
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