The article discusses the conditions necessary to foster photovoltaic (PV) technologies deployment within the UK electricity sector. It explores the incentives to invest in PV technologies by assessing the financial viability of PV system investments in the UK. The analysis focuses on a set of target PV technologies and applications for the domestic sector. First, it provides a picture of profitability and incentives to invest in the targeted PV systems under current UK market, technical, and regulatory conditions. Then, the analysis looks at the role of policy and potential future technological development by exploring the impact of alternative policy instruments and technology cost reductions on the financial viability of investing in PV. The analysis shows that domestic PV investments are generally not profitable under current cost, market, and regulatory conditions. The initial capital costs are too high and the current policy framework is not enough to make PV systems financially viable. The introduction of high-enough feed-in tariffs, as well as the achievement of target cost reductions, would make PV systems financially attractive and would likely increase PV deployment in the UK.
EPIAEuropean Photovoltaic Industry Association and Greenpeace, Solar generation V—2008, Solar electricity for over 1 billion people and 2 million jobs by 2020, EPIA report, 2008.
2.
Jager-WaldauA., ‘PV Status report 2008’ (2008): Joint Research Centre, Renewable Energy Unit, EUR 23604 EN—2008
Ernst & Young. ‘Impact of banding the renewable obligation—costs of electricity production, DTI’2007.
5.
KestertonR., Market support mechanisms and investment risk: Will the renewable obligation allow offshore wind to meet its potential in the UK (2007): MSc Dissertation.
6.
Szabo'S.Jager-WaldauA., ‘Increasing the share of photovoltaics—is it an obstacle or imminent for a competitive European electricity market?’ In Proceedings of the 21st European Photovoltaic Solar EnergyConference, Dresden, Germany, 4–8 September 2006.
7.
WatsonJ.SauterR., ‘Unlocking the power house: Policy and system change for domestic micro-generation in the UK’ (2006): University of Sussex, University of Southampton, Imperial College London.
8.
HausmanJ. A., ‘Individual discount rates and the purchase and utilization of energy-using durables’Bell J. Econ.101 (1979): 33–54.
Energy Saving Trust, Econnect, Elementenergy, Potential for microgeneration, Study and analysis, Final report, 2005.
15.
JardineC.BergmanN., ‘The status of the UK domestic PV market—a review of the impact of the low carbon building programme’ In Proceedings of the Photovoltaic Science Applications and Technology –PVSAT5, Glyndwr University, 1–3 April 2009.
ElliotF., ‘Ministers suspend solar power grants’The Independent25 March 2007.
19.
SeagerA., ‘Thinking of going green at home?—you'd better start getting up early’The Guardian (2007).
20.
KeirsteadJ., Behavioural responses to photovoltaic systems in the UK domestic sector Thesis submitted to the University of Oxford for the degree of Doctor of Philosophy, 2006.
21.
DurischW.BitnarB., ‘Efficiency model for photovoltaic modules and demonstration of its application to energy yield estimation’Sol. Energy Mater. Sol. Cells911 (2007): 79–84.
22.
JardineC.LaneK., ‘PV-COMPARE: Relative performance of photovoltaic technologies in Northern and Southern Europe’ In Proceedings of the PV in Europe Conference and Exhibition, Rome, 2002.
23.
JardineC.ConibeerG. J.LaneK., ‘PV-Compare: Direct comparison of eleven PV technologies at two locations in Northern and Southern Europe’ In Proceedings of the 17th European Conference on Photovoltaic solar energy conversion, Munich, 2001.
24.
JardineC.LaneK., ‘Photovoltaics in the UK: An introductory guide for new customers, Environmental Change Institute’, Report 27, University of Oxford, 2003.
25.
McSharryP. E., ‘Assessing photovoltaic performance using local linear quantile regression’ In Proceedings of the Energy and Power Systems, IASTED, Chaing Mai, Thailand, 2006, pp. 165–169.
26.
PearsallN. M.HynesK. M.MunzingerM., ‘Performance analysis of domestic PV systems in the UK: Results from the domestic field trial’ In Proceedings of the Photovoltaic Science Applications and Technology—PVSAT 3, Durham, 2007.
27.
JardineC. N., ‘Performance of west Oxfordshire district council office's photovoltaic arrays’ In Proceedings of the Photovoltaic Science Applications and Technology—PVSAT 3, Durham, 2007.
28.
RansomeS., ‘How accurate can PV energy yield simulations be?’ In Proceedings of the Photovoltaic Science Applications and Technology—PVSAT 4, Bath, 2–4 April 2008.
29.
BalouktsisI.ZhuJ., ‘Optimized inverter sizing in the UK’ In Proceedings of the Photovoltaic Science Applications and Technology—PVSAT 4, Bath, 2–4 April 2008.
CameronC. P.BoysonW. E.RileyD. M., ‘Comparison of PV system performance-model predictions with measured PV system performance’ In Proceedings of the 33rd IEEE Photovoltaic Specialists Conference, San Diego, 11–16 May 2008.
32.
del CuetoJ. A.RummelS., ‘Stability of CIS/CIGS modules at the outdoor test facility over two decades’ In Proceedings of the 33rd IEEE Photovoltaic Specialists Conference, San Diego, 11–16 May 2008.
33.
JansenK. W.KadamS. B.GroelingerJ. F., ‘The advantages of amourphous silicon photovoltaic modules in grid-tied systems’ In Proceedings of the IEEE Fourth World Conference on Photovoltaic energy conversion, Hawaii, 7–12 May 2006.
34.
MakridesG.ZisserB.GeorghiouG. E., ‘Outdoor efficiency of different photovoltaic systems installed in Cyprus and Germany’ In Proceedings of the 33rd IEEE Photovoltaic Specialists Conference, San Diego, 11–16 May 2008.
35.
Nikolaeva-DimitrovaM.KennyR. P.DunlopE. P., ‘Long-term stability of a-Si:H thin film modules’ In Proceedings of the 21st European Photovoltaics Solar Energy Conference, Dresden, DE, 2006.
36.
RansomeS., ‘A summary of outdoor testing and modelling of PV systems’ In Proceedings of the Third Photovoltaic Science Applications and Technology Conference (PV SAT), Durham, 28–30 March 2007.
37.
RutherR.del CuetoJ. A., ‘Performance test of amorphous silicon modules in different climates—year four: Progress in understanding exposure history stabilization effects’ In Proceedings of the 33rd IEEE Photovoltaic Specialists Conference, San Diego, 11–16 May 2008.
38.
SpenaA.CornaroC.SerafiniS., ‘Outdoor test facility for advanced technologies PV modules’ In Proceedings of the 33rd IEEE Photovoltaic Specialists Conference, San Diego, 11–16 May 2008.
Performance, A science base on PV performance for increased market transparency and customer confidence Integrated Project (IP) funded by the European Commission under FP6, 2009, available from http://www.pv-performance.org/performance (access date January 2009).
41.
Energy Saving Trust, Generating the future: An analysis of policy intervention to achieve widespread microgeneration penetration, EST Report, November 2007.
42.
BahajA. S.JamesP. A. B., ‘Urban energy generation: The added value of photovoltaics in social housing’Renew. Sustain. Energy Rev.119 (2007): 2121–2136
43.
Joint Research Centre, Photovoltaic Geographical Information System (PVGIS). Geographical Assessment of Solar Resource and Performance of Photovoltaic Technology. EU Commission. Joint Research Centre, Institute for Energy, Renewable Energy Unit, 2009, available from http://re.jrc.ec.europa.eu/pvgis/.
44.
KreutzerN.BeyerG. H.KnightI., ‘The modulation of electric load profiles in domestic dwellings by BIPV and options to maximise the load match—an Investigation for the United Kingdom’ In Proceedings of the Photovoltaic Science Applications and Technology—PVSAT 3, Durham, 2006.
45.
LampaditouE.LeachM., ‘Evaluating participation of residential customers in demand response programs in the UK’ In Proceedings of the European Council for an Energy Efficient Economy (ECEEE) Summer Study (EdsBartiauxF.SalnaesA. G.), Mandelieu, France, vol. 3, 2005, pp. 1271–1282.
46.
DTI-Ofgem, Distributed energy. A call for evidence for the review of barriers and incentives to distributes electricity generation, including combined heat and power. In A joint Government-Ofgem review, 2006. Available from http://www.berr.gov.uk/files/file36456.pdf
Ofgem, Reform of the Renewable Obligation 2006: Ofgem's response, Response to Government consultation, 2007
49.
BEER, Statutory Consultation on the renewable Obligation Order 2009, Reform of the Renewable Obligation, Department for Business Enterprice & Regulatory Reform, June 2008
50.
DECC, Government Response to the Statutory Consultation on the Renewables Obligation Order 2009, Reform of the Renewable Obligation, Department of Energy and Climate Change (DECC), December 2008
51.
Ofgem, Review of the market for exported electricity from microgeneration, Ofgem report, 11 March 2008
52.
REN 21, Renewables 2007. Global Status report, Renewable Energy Policy Network for the 21st Century, 2007
53.
REN 21, Renewables Global Status Report, Update. Renewable Energy Policy Network for the 21st Century, 2009.
54.
BodeS.GroscurthH., ‘Incentives to invest in electricity production from renewable energy under different support schemes’, Arrhenius Institute for Energy and Climate Policy Report, Hamburg, March 2008.
55.
MendoncaM., Feed-in tariffs: Accelerating the deployment of renewable energy, World Future Council (London: Earthscan2007).
56.
RickersonW.GraceR. C., The debate over fixed price incentives for renewable electricity in Europe and the United States: Fallout and future directions. A white paper prepared for The Heinrich Boll Foundation, February 2007
TokeD., ‘Making the UK renewables programme FITTER’. World Future Council report, 2007.
59.
ConsultingL. E. K., ‘Policy frameworks for renewables. Analysis on policy frameworks to drive future investment in near and long-term renewable power in the UK’, Carbon Trust, London, 2006.
60.
LesserJ. A.SuX., ‘Design of an economically efficient feed-in tariff structure for renewable energy development’Energy Policy363 (2008): 981–990.
61.
TokeD., ‘Renewable financial support systems and cost-effectiveness’J. Clean. Prod.153 (2007): 280–287.
62.
MitchellC.BauknechtD.ConnorP. M., ‘Effectiveness through risk reduction: A comparison of the renewable obligation in England and Wales and the feed-in system in Germany’Energy Policy343 (2006): 297–305.
63.
Ofgem, ‘Ofgem's response to BERR consultation on reform of the Renewables Obligation’, Response to government consultation, 2007
del RíoP.GualM. A., ‘An integrated assessment of the feed-in tariff system in Spain’Energy Policy352 (2007): 994–1012.
66.
KleinA.HeldA., ‘Evaluation of different feed-in tariff design options—best practice paper for the International Feed-in Cooperation’, Fraunhofer ISI, Energy Economics Group, December 2006
67.
Element Energy,: The growth potential for on-site renewable electricity generation in the non domestic sector in England, Scotland and Wales, Commissioned by Department for Business Enterprice & Regulatory Reform, September 2008
68.
Element Energy and Energy Saving Trust: The role of onsite energy generation in delivering Zero Carbon Homes, A report from the Renewable Advisory Board, November 2007
69.
Ofgem, Review of distributed generation, A joint Government/Ofgem report, May 2007.
70.
EU PV Technology Platform, A strategic research agenda for photovoltaic solar energy technology, Research and development in support of realising the ‘Vision for photovoltaic technology’ Prepared by Working Group 3 ‘Science, Technology and Applications’ of the EU PV Technology Platform 2007.
71.
KeirsteadJ., ‘Behavioural responses to photovoltaic systems in the UK domestic sector’Energy Policy358 (2007): 4128–4141
WiserR.BarboseG.PetermanC., ‘Traking the sun’ The installed cost of photovoltaics in the U. S. from 1998–2007, Lawrence Berkeley National Laboratory, February 2009
74.
Harmon, Experience curves of photovoltaic technology, IR 00-014, IIASA, Laxenburg, Austria, 2000.
