The UK government Department for Energy and Climate Change (DECC) is responsible for encouraging us to use less fossil fuel and to switch to renewables wherever possible. There are a number of sources of energy generally available including wind turbines and heat pumps. Two of the sources however, photo-voltaic (PV) arrays and solar thermal water heating, rely directly on sunshine. The idea that consumers should create their own renewable electricity is called ‘microgeneration’.
DECC realises, of course, that the only form of encouragement that will persuade us to invest in technology to turn our homes into miniature power stations is a financial inducement. So it has introduced the Feed-In Tariff (FIT) based closely on similar schemes across Europe. The idea is that it wouldn’t be attractive, even at the current cost of fuel, for most of us to spend several thousand pounds to save a few units of electricity so the government will pay us for every unit that we generate. The hope is that this will kick start a national movement for microgeneration driven by consumers. This form of subsidy seems very much against the cost-squeezing spirit of the coalition government but, even so, it is going ahead for the time being.
Overall the subsidy is designed to take into account the cost of installing a microgenerative scheme as compared with the amount of electricity that it will produce. So PV solar panels receive the greatest subsidy according to the tariff whilst hydro schemes earn the least. This arrangement extends the logic that is behind the whole initiative which is to persuade consumers to buy into something which is otherwise not very rewarding.
There are two good reasons why PV panels are so cost ineffective that they need overwhelming largesse from the state to persuade rational people in Britain to buy them. The first is that they don’t work very well. According to the experts typical domestic PV solar panels only convert 15% of the sunlight into electricity. Not surprisingly scientists and manufacturers are working to improve these figures. It is hoped that the Feed-In Tariff subsidy will help to stimulate this industry but it is difficult to imagine that it will ever lead to the UK becoming a world leader in PV production. The second reason is that Britain has relatively little sunshine. No amount of hopeful intervention from the government will ever improve this.
Why, then, does the department want to turn the world upside down like this? Why are we spending public money to persuade taxpayers to do something so impractical? The politicians must answer for themselves. Meanwhile the funds that are available will be mopped up by the very least cost-effective option for reducing CO2 emissions.