Whilst China sets new low carbon caps and the Pope preaches a Green Gospel to US Congress, the UK favours nuclear, compensated by billions in state aid subsidies.
It feels somewhat ironic, that this very same EU state aid ‘law’ test could see the sun set on the UK solar industry, by the devastating speed of proposed cuts.
Minister in the pre-2010 UK government, Liam Byrne, was perhaps more honest in leaving an infamous and sarcastic good luck note which said “there is no money left” in his desk, intended for his successors in office. Nevertheless, the UK solar market needs to prepare for an incoming zero-subsidy regime - however suddenly or unexpectedly.
The UK energy storage industry has never had the benefit of subsidy or the contractual simplicity to use as single income contract for financing. We therefore have insights on the new models and opportunities post FiT.
Moixa has delivered the largest network of residential energy storage systems in the UK, installing our MASLOW systems across 300, extending to 500 systems (1MWh) of aggregate storage later this year and has been testing new models for income from grid services, alongside regular household solar self-consumption benefits.
Right size, right time, right place... right markets?
I shared some insights recently on “The future of the UK installer”, a Solar Media webinar on installer opportunities post FIT, on Moixa ‘optimism’ for the new solar market as well as retrofit opportunities to existing solar homes with storage or efficiency measures, and have also published a paper with UK trade association BPVA.
The new regime levels the playing field, shifting solar to maximising self-consumption rather than grid export and encouraging a 'whole systems approach' to energy savings with technologies on their own merits.
Moixa believes offerings should focus on being:
- Right Sized – smaller arrays per home to maximize self-consumption and reduce peak solar network challenges. Typically this means half current size.
- Right timed – incorporating energy storage to store and shift power to peak times and balance system over day. This improves self-consumption and enabling new income and trading models.
- Right placed – targeting smaller properties, particularly urban, with solar offerings, previously viewed as too small for larger subsidy driven arrays. This could open 2m new roofs.
- Retrofit sales– targeting the existing 650k+ homes with solar with storage, efficiency improvements, LED Lighting.
Moixa analysis of Energy Saving Trust (independent energy efficiency organization), Elexon (the body overseeing governance for electricity balance and settlement in Britain) and average energy and export data, suggests that the optimal solar array on an average home to ensure near 100% self-consumption is only 0.75KWp of panels – so most power is used in base load. This should be larger with a solar hot water heater or with battery-based energy storage.
For an average UK home’s energy use as profiled by Elexon, which is typically 10KWh a day for non-heating – with 4KWh over peak period (non-solar hours), an average optimal system would be 1.6KWp of solar and 2KWh of storage, to maximise natural self-consumption and shift balance of power to half average evening peak.
Our Moixa pilots for the government Department of Energy and Climate Change (DECC) and national research booster agency Innovate UK across communities have created evidence on how this both saves home users money on the solar and storage savings, but more significantly how this can reduce strain and cost to utilities and networks during the peak evening hours - which are otherwise expected to see increased evening, time-of-use charges and levies from the network operator, National Grid.
We’ve been demonstrating how to aggregate all distributed batteries (Moixa or third-parties) in our platform to access income from these services or support utilities and communities with new tariff offerings.
Challenges remain, though, in the UK market, until there are clear signals from government that solar, storage and efficiency are good things. In the absence of subsidy – having favorable reliefs, or regulation that simplifies installing, asset finance and trading of such assets we could still see significant post-FiT sector growth.
Whilst zero FiT is clearly bad news for the sector, there is a strong case for maintaining some incentives for small scale residential solar (2KWp) and higher export premiums in peak hours that encourage storage, and make such offerings easier for mass market, urban and social housing sectors.