Sunday, 12 August 2012

How a Feed in Tariff Loophole is Leaking Carbon Dioxide

The current design of the Feed in Tariff  has created a "perverse incentive" to increase financial benefits at the expense of the environment.

The current Feed in Tariff pays 4.5p for each unit of solar electricity you generate but don't use, exporting it to the electricity grid.  If you use the electricity yourself, you avoid charges from your electricity supplier nearer to 12p per unit. So, to make the greatest saving from a solar PV system you should try to use as much of your generated electricity as possible, for example by vacuuming the stairs rather than sitting outside and sunning yourself.

Unfortunately, for domestic-scale systems, this exported electricity is not measured on a meter, it is instead assumed to be 50% of whatever electricity is generated.  This means that you get your money for export even if you actually export nothing. 

Enter a number of companies with "Excess Energy Switching Units" - electronic gizmos to help you use up your electricity generation rather than giving it away for someone else to use.  These systems turn on the immersion heater on your hot water cylinder when the PV electricity generation is higher than the electricity use.  It's worth your while to use up the electricity to heat water in the hot water cylinder, even if you're saving only 3 or 4p per unit on gas heating - because you're paid as if you were exporting electricity anyway.

So what?

Well, the issue is that the electricity we use is mostly made by burning gas and coal at a relatively low efficiency in a power station.  A unit of electricity is not only worth more in pence, it also cost more in carbon dioxide emissions than a unit of gas heating.

If a unit of electricity is exported from your home, it displaces a unit of electricity used somewhere else on the grid, and prevents the emission of 522 grams of carbon dioxide.

If instead, a gas-heated home installs one of these switching unit and heats water instead of exporting that unit of electricity, it is preventing the use of a gas boiler to provide a unit of heat, and saves only 212 grams of carbon dioxide.

The solarblogger calculates that taken over a 25-year lifetime, a typical solar pv installation without a switching unit would save 33% more carbon dioxide and result in the emission of 5.5 tonnes fewer of carbon dioxide gas than a system with a switching unit (see below).

What's your opinion?  Post a response below.


The Maths Bit

Let's take a 2kWp system and assume 850kWh/kWp.yr and 50% export.

If the 50% is exported, it prevents the emission of 850x0.522kg of carbon dioxide, 444kgCO2/year.

If that 50% is instead diverted to an immersion heater, and assuming a boiler efficiency of 80%, then the saving is 850x0.212/0.8 = 225kgCO2/year

(Carbon intensity in kgCO2/kWh are taken from draft SAP 2012)

The PV system with a switching unit has resulted in 220kg of extra carbon dioxide emissions each year compared to a PV system without.

Total emissions saved wihtout switching unit: 444kg x 2 = 888kg
Total emissions saved with switching unit: 444kg + 225kg = 669kg
Increase in emissions benefit from system without switching unit: (888-669)/669 = 33%
Lifetime emissions resulting: 220kg x 25 years = 5.5 tonnes.


  1. I have received offers from my solar panel installers for just such switches, and more recently a battery storage facility to store excess electricity for use at night or at times of higher demand during the day to minimise the amount of draw down from the grid. I am sure there will be many more technologies we can bolt onto our systems over the 25 year tarriff period

  2. Considering the individual plot, the house concerned will be using less fossil fuels by using a switching unit to direct the solar energy they have produced to differing areas of the energy generation of the home - as such making it more efficient. I do however, see you point that when taken as society as a whole there is then less energy finding its way onto the grid from renewable sources.

  3. I think the tariff is the wrong way round the export tariff should have been the greater return that way we would make our homes as eficiant as possible to get the best return.

  4. The experience that we have is that the majority of homes in fact export approximately 70% of their generated energy so many homeowners are 'short changed' also keeping the majority of energy in the home helps to stabilise the antiquated nation grid network helping more people to benefit from solar PV, especially those in rural areas where the DNO will not accept more self generated power.

    1. That's a really interesting figure. Can you say what sort of size of system your experience would be based on? Are the installations nearer the 4kWp level or smaller? Are the occupants at home during the day or at work and school?

      Most of the ROI calculations I have seen (including those by Energy Saving Trust) assume that 50% of the generated electricity is used in the home. If the figure is actually nearer 30%, then the financial returns are going to be quite significantly overstated by assuming 50%.

      See my blog article on the proportion of solar electricity used by householders here