Solar Farms in Wales – A Rip off or Energy Salvation?

A Solar Farm given planning permission in Wales, would seem at first sight to make as much environmental and economic sense as Saudi Arabia using oil for desalination to export bottled water.

Over 50,000 solar panels, on 59Ha of land will only power 500 homes.

Why are we seeing a rash of solar farm applications, and not say biofuel plants? Well one reason may be that even the most efficient biofuel in the UK climate micanthus would only generate about an eigth of the output per annum for the same area of land.

The reason for the interest is the introduction of feed in tariffs(fits) of 30.7p/kwh. Apparently the minister is alarmed as fits were intended for microgneration and is conducting a review.

Will a shifted subsidy structure save money or be more energy efficient? Caer Delyn has done the math and the reported savings are illusionary.

If you are going to have feed-in tariffs at all then it makes sense to use them in installations that have economies of scale. Don’t complain about solar farmers taking the main chance in a distorted market if the purpose of market distortion is to pay the full carbon price. Lower susbisides are needed for ground mounted solar than roof mounted solar for this reason in order to reach ‘grid parity’ (the point at which subsidies are no longer needed). Farmers will always suck up what subsidy governments throw at them whether wheat, sun or doing absolutely nothing.

Germany has had feed-in tariffs for many years. At what cost?. 2010 saw a huge growth with an increase in pv efficiency. Germany now generates about 1% of its energy from solar pv at a cost per householder of about 80 euros.

Germany was going to reduce its subsidies, then came Fukashima, and the decision to end Nuclear. There may be a carbon consuming ‘dash for gas’ to prevent the lights going off.

Germany is already expanding wind as fast as it can, solar pv is one of the few renewables that can significantly expand to fill the gap. So will german consumers be paying several thousand euros a year on electricity bills to subsidise feed in tariffs? A similar cost/household as east-west unification?

Notice this excellent diagram from McKinsey

It shows grid parity being reached in Germany before sunnier Spain or Texas.  The cost of manufacturing and installing a photovoltaic solar-power system has decreased by about 20 percent with every doubling of installed capacity. The cost of generating electricity from conventional sources, by contrast, has been rising along with the price of natural gas.  Growing demand for solar power created by feed-in tariffs to achieve grid parity creates more opportunities for companies to reduce production costs by improving solar-cell designs and manufacturing processes, to introduce new solar technologies, and to enjoy lower prices from raw-material and component suppliers competing for market share.

With this backdrop McKinsey have boldly estimated that by 2050 Europe could go 100% non-subsidised renewable.

Critics of the cost and efficiency are looking at short term marginal costs rather than long run average costs. The entreprenuer pays the former, the consumer will pay the latter.

It is like criticising George Stevensons Rocket for losing too much steam. Most of the crazy pioneers in this sector will probably lose money in the medium term as their first generation technology is rapidly superceded. But they will be laying the foundations for cheap clean energy future for all of us.

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