A recent media tempest has been brewing in response to the swelling success of the large-scale solar plants in the UK, with mainstream hacks uniting against the installation of solar photovoltaics on green or brown field sites.
Several mainstream publications have reported negative comments in relation to solar panels appearing on Britain’s land, claiming that the renewable technology will “blight our countryside,” “waste taxpayers’ money” and “prevent farmers from growing crops”. As I discussed in my recent post, ‘Does the solar panel gold rush really threaten to ruin our countryside?’ none of these points are valid when examined closely.
Yesterday, (November 11) the Minister of State for Climate Change, Gregg Barker helpfully added fuel to this fire saying, “We inherited a system that failed to anticipate industrial field arrays. While we will not act retrospectively, large field arrays should not be allowed to distort the market for roof mounted and other PV or other renewables.” So, put more plainly, the Government designed the FiT for small-scale residential solar installations, did not expect large-scale green or brown field plants and did not think this possibility through.
While the Government’s blunder could throw a spanner in the works for large-scale PV in the UK, I still believe that there is a case for these field-based plants, and luckily I have quite a few industry lobbyists behind me. There are three points, yet to be made by these widely distributed naysayers, which need to be outlined before anyone puts their muddy wellington boot down on the issue.
Economies of scale
As with most things, when it comes to solar, bigger is better. By installing on a large scale as opposed to several small-scale systems, the costs are significantly cut. This can be achieved in the following ways:
Purchasing: bulk buying of materials through long-term contracts,
Managerial: increasing the specialization of managers,
Financial: obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments,
Marketing: spreading the cost of advertising over a greater range of output in media markets,
Technology: taking advantage of returns to scale in the production function.
Each of these factors reduces the long run average costs (LRAC) of production by shifting the short-run average total cost (SRATC) curve down and to the right.
Jobs & Training
Once planning has been granted for a large-scale system, a specialised workforce needs to be brought in to bring it to realization. This workforce will be made up of many specialists and tradesmen, i.e. welders, site engineers, electricians and construction personnel. Let's face it our workers in construction haven't had an easy time of it through this recession and working on a solar park could be just what the unemployment doctor ordered. Currently, hundreds of individual installers are paying money out of their own pocket for training to install solar panels. If a workforce for a large-scale system is trained up by the developer however, they can then be utilised after the completion of the project for smaller scale jobs. This puts the cost burden of training increasingly on the larger scale developers. This saves money and creates jobs, and we all know that this country could do with both of these.
Although many may be opposed to the idea, inward investment is a surefire way of getting the UK on track to meet its CO2 emissions target and create job rich industries in the UK. Foreign investors are literally queuing up to inject money into the British solar industry, in order to benefit from the country’s feed-in tariff. Perceived risks to larger scale solar could influence decisions that are currently being made by foreign panel, inverter and BOS component manufaturers who are considering locating assembly and production plants in the UK to service the local and wider European market.
What’s worrying is that this media storm could be just the beginning – which category of solar installation is going to face speculation next? Is industrial-scale rooftop solar next on the firing line? What about social housing?
If DECC is worried that large-scale solar will skew the market away from domestic installs and essentially eat up the money available for the FiT before it can be used in the smaller-scale deployments than how will they view the range of large-scale social housing devployments that have been announced in the past two months. These projects have distinct economic benefits of scale (cited above) and in addition provide much needed support for local councils to become the low carbon transition leaders that DECC demands of them even as Eric Pickles strips away their primary funding from the national coffers.
All things considered (my previous blog post included), there is clearly a strong case for these systems in the UK. And I am not a lone voice on this matter, since many hundreds of UK development companies are already set up and ready to install these systems – what happens to their jobs if large-scale is shunned?
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