Life after the 'Green Rush'
Rexel UK business development director, Brian Smithers, looks at the impact of the Government's Green Deal and how businesses can prepare for a sustainable future.
There is no question that the new Green Deal is welcome news for the industry. The programme will help boost energy efficiency across UK homes and is an important step in the Government's plan to meet its carbon emissions cuts.
But at the same time the Government is dropping subsidies for solar panels by as much as 50% from March 3. The news came quicker and deeper than anyone expected, causing a 'green rush' with consumers and installers scrambling to lock themselves into the higher rate before the deadline.
As we, the green energy industry, emerge from the energy equivalent of the January sales, the question remains how do we prepare for a sustainable future? The solar sector has been left wondering if we might have had more reliable sales in the years ahead as we prepare for a time when fossil fuels are no longer the most cost effective consumer energy solution.
There can be no question that the high returns from solar subsidies did a fantastic job getting green energy on the household agenda. They made solar installations a viable long term consumer investment. The high rates played a critical role spurring consumer adoption for a product and industry in its infancy. Early adopters take a gamble on a technology as yet unproven and their investment needs to be recompensed as they forge the way for the mass market.
What matters now is that we weather the storm of the coming years. We need to continue to educate suppliers and consumers about the long term benefits and return on sustainable energy investments.
More important still, we must caution shoppers against seeking out the lowest priced, untested technology in a bid to maximise supposed returns at the new PV FiT rate. If you consider that even the tilt and direction of your roof affects the level of energy generated annually, imagine the impact of fitting inferior quality products on energy generated over time.
It's critical that building professionals as well as consumers invest in established PV technologies that have already proven they deliver. A bad experience from one supplier won't necessarily be felt for several years as the kit depreciates, by which point the business may no longer be around to account for its product. At the same time the industry must do more to educate the public about the benefits of renewable energy.
Predictions for the green energy industry after the "green rush":
1. International gas prices will continue to soar and fuel poverty will become a more pressing national issue. As a result, up-skilling the contractor workforce and educating consumers about green energy solutions will be more important than ever before. Green solutions providers will need to work extra hard to prove the value of green investments, particularly in the wake of the PV FiT cuts. Rexel's October 2011 consumer survey on energy efficiency, which was conducted by Harris Interactive, showed that 78% of UK consumers cite reduced expenses as their main motivation for going green, strongly indicating that a better understanding of financial incentives is necessary to ensure the future of energy efficiency in the UK. The ultimate goal over the next two or three years is for the industry to reach green energy parity - where the price of electricity from renewable sources is equal to that of electricity generated from fossil fuels.
2. Emerging technology will make its mark on the green energy market in 2012, one example being air source heat pumps (ASHPs). The pumps absorb heat from the air which can then be used to fuel radiators, underfloor heating systems or warm air convectors. Such systems may be further supported by the government's Renewable Heat Incentive (RHI), which aims to encourage businesses and consumers to use renewable heat sources to power their heating by offering financial support. The scheme is already in operation for businesses and payments for domestic properties are expected to launch late in 2012 alongside the Green Deal.
3. The Green Deal will drive consumer awareness of the energy savings possible through energy efficient solutions. Set to launch in late 2012, the Green Deal will provide help with the upfront cost of making properties more energy efficient. This makes reducing carbon emissions more affordable and means that more people can benefit from lower energy bills and a reduced carbon footprint. Under the scheme, the initial cost of installation is covered by the reduced energy bills it unlocks, and the lack of an upfront cost should mean that more consumers make the switch to using greener forms of energy in 2012.