The History of Solar Energy
The history of solar energy in the UK is a seven year-old tale beginning in 2011 with the the advent of two government subsidies: the Feed in Tariff and the Renewable Obligation Certificate.For years the industry’s turbulent history saw solar farms boom, rent a roof schemes crash, following a trail of amazing recoveries and gut-churning depressions; today UK solar has changed dramatically – it has had to in order to survive.
Rent a roof solar kicks things off
For the first few years of UK solar most installations were on on domestic homes. Many people paid for their own solar energy systems but by far the largest sector of the market was an innovative – and unexpected – business model – renting people’s roof to host someone else’s solar panels.
Under the rent a roof model, companies offered an attractive cladding of solar energy for householders; roofs – entirely for free. In return for their new status as a solar landlord, the house plugged into a source of clean – and discounted – electricity. This was the golden era of UK solar: hundreds of thousands of householders signed up, and continue to receive low cost solar energy to this day.
A round of feed in tariff reductions followed, and rent a roof became less attractive. But around this time the price of solar fell sufficiently to kick off a boom in another area of the solar industry – solar farms.
Community Energy flourishes
At the same time community energy kicked off. Little noticed, in 2007 in the Lake District Baywind Energy had created a new kind of community enterprise – going door to door to solicit a collective creation of a field of winturbines outside town. In Lewes, Sussex, OVESCO pioneered a similar model using solar. Oxford, Bath, Bristol, Brixton, Sheffield, Plymouth, Cardiff and other towns and cities soon followed suit. The sector began to grow.
The growth of Solar Farms
From around 2013 to 2015 solar farms came to dominate the UK solar market. Domestic firms retired, and a new wave of private equity backed developers began scouting the countryside looking for potential solar fields. The key was the national grid – farmers who owned fields near power lines found themselves solicited by increasing amounts of investment companies looking to rent their grazing grounds.
And they signed up. With farm land earning less than £1000 an acre, solar farms offered quadruple that – and removed the yearly effort of ploughing, seeding and harvesting.
For 3 years solar farms proliferated across the country. Suddenly the UK was the fastest expanding solar market in the world. Developers and wholesalers from across Europe flocked to these shores.
Things grind to a halt
Two things brought the solar boom to a halt.
The first was grid capacity. Connecting solar farms to the grid is a hideously expensive business. Therefore it’s imperative to built the farms close to a power lines. And soon those cables reached capacity. Regional power companies creaked. Eventually it became very difficult to find fields sufficiently close to the ageing grid network.
Then came the inevitable subsidy cuts. The government retired the renewable obligation certificate, which guaranteed solar farm owners a particular price for their electricity.
Although the government promised a replacement (known as ‘contracts for difference’), few people understood the new regime and it was very difficult to get access to CFD auctions. With effectively no subsidy, farm-sized systems were rendered financially unviable, and the UK dropped for the largest solar developer in the world, and out of the top ten.
An industry falls into recession
The tremulous end of domestic rent a roof, the lack of availability of power line capacity and the removal of ROCs threw twelve thousand solar installers, developers and wholesalers out of their jobs. The industry fell into a depression. International firms moved abroad; indeed, the UK’s biggest solar developer, SolarCentury, withdrew from the UK market and concentrated it’s effort internationally. The UK became a key springboard out of which international solar development bloomed, but things had hit the wall.
Still, the industry began to shape shift. Instead of building new systems, new investment funds sprang up and attempted to buy what already existed. In the short time it had existed solar energy had proved to be a reliable (and not too risky) investment. Pension funds wanted in.
To satisfy this new demand, huge solar funds sprang up and started to buy solar farms. Next Energy, for example, aggregated tens of solar farms into their portfolios. Many companies that specialised in due diligence and solar maintenance began carving themselves a niche in this buying up boom. In perhaps a sign of things to come, the largest soloar investment fund Lightsouce – sold itself to BP.
The story today
Now – with little new solar being created, the hunt is on for new business models. New companies have been formed around battery storage, with prices falling in the same way that solar has done. Blockchain, electric vehicles will continue – a heady melange of new technologies many believe will revolutionise the underlying solar business model.
That still goes on. We’re in a quiet phase. There are significantly less developers, wholesalers and installers than there were. The money is still there; over the years the city of London has come to appreciate solar projects. But the history of solar is always one of boom and bust. 2019 sees the end of solar subsidies in the UK. At the same time solar prices are once again falling dramatically. The industry changes shape again – from a reliance on subsidy we now rely on selling our electricity to whatever market is available – one site generation or sales to the grid.
As we approach grid parity, things are perhaps set to pick up again. One thing’s for certain: solar wont be put back in the box.
