Fwd: U.K. Solar Installations Hit Record in 2010 on Higher Incentives

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U.K. Solar Installations Hit Record in 2010 on Higher Incentives
2011-01-07 00:00:00.0 GMT

By Alex Morales
Jan. 7 (Bloomberg) -- The U.K., which had its 12th coldest
year on record in 2010, installed more solar power than in any
other year, data from the energy regulator Ofgem show.
Solar panels with the capacity to generate more than 42
megawatts of electricity were registered to receive above-market
power prices last year, according to data e-mailed from the
regulator Ofgem. The facilities were spurred starting in April
by a government program offering as much as 12 times the market
rate for power from renewable sources.
The installations covered more than 16,000 homes and
commercial properties. The new rules included in a "feed-in
tariff" are aimed at expanding the clean energy industry and
led to a 10-fold expansion in solar power in the U.K.
"The feed-in tariffs sparked investment in an economic
downturn," Andrew Lee, head of Sharp Corp., an Osaka-based
electronics maker's U.K. solar unit, said in a telephone
interview. "They've been a birth for the solar industry and
we've responded by creating jobs."
A total of 4 megawatts of solar power facilities were
installed in the U.K. in 2009 and 4.4 megawatts in 2008,
according to Bloomberg New Energy Finance. Sharp says it's
working to double production at its solar cell factory in Wales,
the biggest in Britain, and Lee said the company has added about
300 new jobs at its expanded plant.
The impact on small-scale renewables has been
"tremendous," Dave Sowden, Chief Executive of the Micropower
Council, an industry group, said in a telephone interview.


"They've been a complete game-changer in the market,"
Sowden said. "We've seen more than a threefold increase in the
number of companies registered as installers. It started 2010 at
about 600, and ended at over 2000."
Larger companies from the German utility E.ON AG to Tesco
Plc, the biggest U.K. supermarket are tapping the market,
offering homeowners help to buy and install panels, and tap the
tariffs, which apply only to small-scale installations of
renewable energy.
The Ofgem figures, which are dated Jan. 5, also showed 10.8
megawatts of wind power and 4.3 megawatts of hydro-power were
registered to benefit from the tariffs from their introduction
in April through December.
The guaranteed prices were introduced by the Labour
government, which in May lost a general election, ceding power
to a coalition of Conservatives and Liberal Democrats. The new
government, in an October review of spending across all
departments, said it would maintain the tariffs for now.
The tariffs are guaranteed for 25 years and vary according
to capacity and whether panels are fitted to old buildings or
new ones. They're as high as 41.3 pence per kilowatt-hour, about
eight times the current day-ahead U.K. power price and 12 times
the power price on April 1 when the system began.

Investor Certainty

The tariffs are "positive for investors in renewable
technologies because it gives much more certainty on the price
they can achieve," Steve Jennings, who leads the utilities
consulting practice at PricewaterhouseCoopers in London said in
a telephone interview. "Investment decisions need certainty in
order for developers to invest in these installations."
The U.K. Met Office said yesterday that U.K. temperatures
averaged 8 degrees Celsius (46 degrees Fahrenheit) in 2010,
making it the 12th-coldest year in a series dating back a
century. Solar panels can still generate power in cold
temperatures and overcast conditions.
While last year's 42.5 megawatts of installations mark a
record for the U.K., more than doubling the total installed
solar power base from 32 megawatts at the end of 2009, it's
still a fraction of activity in world leader Germany, where BSW
Solar, the German Solar Industry Association, estimates 2010
installations will range from 7 gigawatts to 8 gigawatts. A
gigawatt is a thousand megawatts.
In the spending review, the government said changes to the
tariffs will be made "at the next formal review." When the
previous government introduced the subsidy in April, it said any
changes to the system would come in April 2013. The energy
department says it may review the tariffs earlier if
installations exceed forecasts.
"We're concerned the government might curtail growth by
putting a cap on installations next year," Sharp's Lee said.
"We hope to work with them to maximize the job and industry
growth potential for UK Plc."

For Related News and Information:
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--With assistance from Marc Roca in London. Editors: Reed
Landberg, Mike Anderson

To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or

To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or