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Sunshine gold rush?

David Gregory | 11:32 UK time, Monday, 25 October 2010

Close-up of the sun

So last month we reported on solar panels being installed on council houses in Stoke. And today news of a company that wants to install "solar farms" in fields in Shropshire.

So why the sudden interest in solar power?

Well it's not just solar power it's also wind, combined heat and power and others and it's all because the "feed-in-tariffs" for renewable energy mean this sort of small scale investment can generate a healthy (subsidised) profit.

Taking electricity generated by solar panels as an example you get to reduce you bills by directly using the energy produced (around £100 a year) and you then get money for any you sell to the grid. And the whole lot attracts a government subsidy (around £500 a year).

This subsidy is locked in for 25 years (although for other renewable energy sources the tariff is only fixed for 20 years)

This is a scheme that seems to have escaped unaffected by the recent spending review. Although iI expect the government will be reviewing things at some point. With solar power for example that will most likely be when a certain number of panels have been installed across the country.

So for companies, people or councils who can commit to a long term installation this tariff means you should see very good returns. For an average home around £11,000 clear profit. And that's why councils are scouring Google Streetview to see how many south-facing council houses they own and why farmers are being offered money to mix solar panels in with their sheep.

Of course all these figures are just a rough guide and your own solar panel mileage may vary. You should always talk to an independent expert before undertaking any scheme like this and of course the government could change the tariffs on offer at some point in the future.

You may be asking who is paying for all this subsidy? Well technically it's the electricity companies but in reality it's all of us as the costs are likely to be passed onto customers.

The eventual aim of this investment we're all making will be to boost renewable energy produced in the UK and long term also the infrastructure that goes with it. For example if you are tempted by all this you will find solar panels here more expensive than europe because we just don't produce that many ourselves.

If you want to see if this scheme is for you a good place to start is the Energy Saving Trust's calculator which you can find here.

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  • 1. At 2:22pm on 25 Oct 2010, Ian G wrote:

    Why blight the countryside with solar panels? We need to feed ourselves, as well. On the other hand, why only council housing with south-facing roofs? Why not a programme to put these panels on every south-facing roof in the towns and cities where they won't blight the country side and where most of the power is needed?

    It seems to me that commonsense is the answer.

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  • 2. At 7:11pm on 25 Oct 2010, Virgill wrote:

    As the director of a company that operates a similar scheme with commercial solar farms i welcome the debate. i agree with Ian in the fact that a common sense aproach needs to be adopted. it is difficult to place large Solar installations in towns and cities due to the obvious lack of space. Using farm land that is not used for food production seems to a good middle ground as it provides an income for the farmer to secure his future enabling him to invest in more food production. Yes several local authorities and housing associations are looking at the comercial viability of installing Solar PV to housing stock and the response has been a positive one. I feel that over the next 12 months there will be a boom in the number of Solar installations and will become more mainstream. Solar PV offers a sensible choice to energy production compared to the alternatives.

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