FIT Farmers

There was an informative article about FITs for solar PV by Leo Hickman in today’s G2.  It turns out – surprise, surprise – that the FIT scheme has flushed out those subsidy-meisters, our friendly farmers.

The idea was to subsidise solar PV on peoples’ roofs, for reasons that anyway make no sense, as I’ve noted several times before.

However you cut it, the maths shows the scheme pays for itself within a decade at most and then provides an astonishing income for another 15 years – maybe £600K pa for a £4m upfront capital outlay!  Indexed at RPI!!

A commenter on Hickman’s blog claims that Spain had promised FIT recipients €126bn before it reneged on its commitments.

This week’s Comprehensive Spending Review seems to have only reaffirmed that the scheme will be reviewed in 2013.  It seems to me we could have incurred a significant liability by then.  According to the DECC paperwork, there is a limit (5MW, hardly “micro”-generation) only to the size of individual FIT installations, not the total of installations.

The area covered by the Wheal Jane scheme Hickman describes is only 5 acres, about 2 hectares.  There must be scope for thousands of such schemes in the country.  One thousand schemes would cover 2000 hectares, that is, only 20km2, i.e. virtually nothing compared to the available area, in fact around 1/10000th or 0.01% of it, that of Great Britain being in excess of 200,000km2.

The subsidy for Wheal Jane alone is around £500K/yr (based on 29.3p/kWh compared to a wholesale price for other electricity of 4-5p/kWh).  1,000 similar schemes or the equivalent would cost £500m/yr, so we’re talking serious money.

1000 similar schemes would have a similar capacity (around a GW) to a large gas or coal or a typical nuclear power-station, but would operate at only around 20% efficiency, rather than, say, 90%.   So we’d have to pay a total subsidy of over £2bn/yr to Wheal Jane type schemes to provide a power-station’s worth of electricity.

The calculation of the cost of the subsidy isn’t greatly affected by the efficiency of the Wheal Jane scheme (since the price paid for the electricity is virtually all subsidy), but it might be worth pointing out that the subsidy level was based on depoying solar PV panels on roofs of normal housing.  Domestic FIT electricity generators get around 45p/kWh for selling electricity to the grid – approx. 40p/kWh subsidy – whereas the farmers get 29.3p/kWh – approx. 25p/kWh subsidy.

I wonder if the difference is enough, because, frankly, deploying solar PV in a field makes much more sense (but not as much sense as something cheaper, such as solar thermal power generation or wind turbines in the same locale).  First, it’s possible to track the sun, increasing the efficiency of the installation significantly compared to a roof which faces only in one direction, which is most likely due south and has a fixed rather than variable elevation.  This alone probably must surely almost double the amount of electricity a fixed area of panel can generate (since the orientation of a fixed panel will almost never be perpendicular to the direction of sunlight, whereas that of a moving panel can be most of the time, that is, except when the sun is low in the sky, when sun-tracking panels in a field would shade each other).  Second, the installation and maintenance costs per unit are far lower in a field than on domestic roofs when scaffolding or other equipment will likely be necessary for safe access.  Third, economies of scale reduce all costs dramatically: no need to travel between installations of separate panels; there can be a permanent maintenance presence on site; the purchase price for the panels is likely to be a lot lower.

I strongly suspect that the lower tariff for large-scale solar PV installations isn’t low enough, even compared to the FIT for domestic solar PV electricity generation.

FITs for farmers is a scandalous subsidy we’ll be paying through our electricity bills for decades.