Contact us today on 01992 800 666
The British Government has recently announced plans to transform the Government estate as well as other properties such as factories, supermarkets and car parks into solar hubs. This is obviously a huge plan and one which shows government support for solar PV distributed generation.
For the general public, the plans in relation to solar PV distributed generation is great news.
Renewable energy was primarily an environmental benefit in the first instance and the European Union implemented renewable obligations due to concerns in relation to CO2 emissions. When thinking about the environment and future generations the European Union’s perspective was one where change was required. A political issue rather than a financial concern.
Countries within the European Union, including Germany and Denmark want clean air , together with lower CO2 emissions and are prepared to have high electricity prices to pay for green energy. While in other European countries they were less interested in environmental concerns and were more bothered about the cost of renewable energy.
The reality of renewable energy and how it influences an economy is more complex. It has a lot more to do with where cost savings are redistributed as opposed to the actual energy costs.
The United Kingdom was an energy exporter during the 1990s as a result of ample natural gas and oil resources. This enabled the country to cover energy requirements using the resources available internally. Indeed, the United Kingdom was even exporting a surplus. Times have changed and by the middle of the 2000’s, production from the North Sea dropped and there was a requirement to source energy from abroad. It is now estimated that the UK spends in excess of £9.5 BILLION on importing oil! Of course, this fails to take into account any imports for natural gas, coal, and uranium, so the current energy situation with an United Kingdom is somewhat precarious.
There are some wide-ranging implications for the economy, including exporting jobs to other countries. Instead of increasing investment in energy production within the United Kingdom and therefore creating local jobs, the work is sent abroad.
In relation to the United States economy every $1.00 spent at a petrol station generates $0.40 revenue for the economy of the USA, the rest is distributed to other countries. The ratios within United Kingdom may vary but the essence of the issue is very similar. If money circulates within the economy it will stay there, thus creating more jobs and generating more taxes.
The concerns are exacerbated when oil prices rise and there are significant problems when a recession starts. Many of the economic recessions of the past were preceded by a significant increase in oil prices. The importation of oil for developed countries is a relatively low percentage of GDP, but it is still very significant when measuring its impact on the economy.
Populations and economies will always take time to adjust to higher prices for energy. Our adjustment towards more energy-efficient solutions such as building integrated solar PV or driving hybrid cars takes time.
In the short-term more expensive energy discourages people from spending money on other items. It is a necessity to use more money from your disposable income to pay for energy that may be required to commute, heat your property and watch TV at home. As a result of these price increases people automatically reduce their spending on clothing, holidays, gifts and other forms of entertainment.
Ultimately, this means that businesses will have a hard time selling their products and services to people who do not have the disposable income to pay for it. Consequently, you will see an increase in redundancies and people losing their jobs. The cycle continues and these businesses will reduce their orders from manufacturers and other suppliers, thus having an impact on their business operations. The downward spiral will continue throughout the supply chain and this is all as a result of no viable substitute for oil.
In some European countries such as Denmark’s where they have high electricity prices, they feel it is sustainable as long as energy is produced domestically. Electricity prices within Denmark are approximately twice that of British prices, however the GDP per capita in Denmark is higher than the UK and unemployment is lower.
As a result of these assessments, you could conclude that generating energy domestically is the solution. So, with all the energy resources in the domestic locality (renewable or not) it is obviously best to utilise the cheapest energy opportunity, or is it?
In United Kingdom electricity is produced and delivered by 6 energy companies and they are widely perceived as the cheapest option. People don’t often appreciate the opportunities of rooftop solar PV installations and continue to utilise electricity from the grid. If you analyse the market further, you will see how money is distributed. In 2012, the 6 energy companies made a combined profit of £3.7 billion and from 2010 to 2013, energy prices increased by 36%. Furthermore, only two of these six companies are actually British organisations. Ultimately, you will notice a massive transfer of value from customers to corporations.
With solar PV comes a changing of the guard and a shift in the balance of power. Furthermore, the UK government wants a shift in the supply of energy from the big 6 energy companies to multiple suppliers. The objective of such a plan is to increase the flow of money to local communities, as opposed to large corporate organisations, thus increasing job prospects within the local economy.
In relation to the costs of solar PV, they are typically all local costs , including planning, construction, maintenance and specific funding solutions. With solar PV, supply issues are not a concern as the fuel is free and abundant. Consequently, less money needs to be spent on importing energy and more investment can be made in the local area. Having multiple solar PV installations influences the economy in a positive way because energy price rises will have a much lower impact.
For both domestic and commercial solar PV, there is no requirement for electricity transmission and distribution because the vast majority of energy is consumed on-site. However, some excess electricity will be pumped back to the grid for payments through the feed in tariff.
As well as the sharp increase in both domestic installations and large-scale solar PV projects, solar crowd funding can also have an impact on energy self-sufficiency and prosperity! Crowd funding enables people to invest in energy generation projects, so whatever happens with the market there will still be significant benefits. In scenarios where support for the use of solar is generous and electricity bills are higher, return on investment will be greater.
Solar PV offers a secure future, get in touch with Sustain today for further information on your solar future.