Sunday 4 November 2012

Who's Installing Solar PV?

In recent months I've heard a number of people saying of the solar PV market in the UK that "the domestic market is dead" and "commercial installations are where it's at".   Do the statistics support this?  Let's have a look.

The two pie charts in the graphic below shows the proportion of PV  installed under the Feed in Tariff (FIT) by the size of the installation.  It covers two six month periods, October 2011 to March 2012 and April 2012 to September 2012.  The second period is post-April, after which the government had largely set in place its measures to slow down what was rapidly becoming an unaffordable incentive scheme.  The earlier period spans three peaks caused by the race to complete installations before successive "improvements" to the scheme came into force. 
Chart showing how the solar PV market has developed in the last 12 months in the UK
As the tariff levels have reduced, the savings from own-use of the electricity generated become a more and more important proportion of the financial return. That's because if you use a unit of electricity generated you save around 12-15 pence, if you export it you get 4.5 pence.

Commercial buildings tend to use most of their electricity during the daytime - powering computers, industrial processes, lighting and air-conditioning - at least five days of the week, and sometimes seven. This matches periods of maximum PV generation very well.

By contrast, domestic properties tend to use electricity in the evening, so less of the electricity generated is is used in the building and the financial rewards are likely to be smaller. Installations in the size range of 10 to 100 kWp tend to be commercial scale installations on factory roofs, farm buildings, offices and schools, and this segment of the market has increased its share of the total. It hasn't grown, but it has shrunk much less than other sectors.

However, this increase in share hasn't been at the expense of  domestic scale installations, which have held steady at around 70% of the market and still represent the lion's share of installations by kWp as well as by number of installtions. Instead, installations in the 100-5000 kWp range now take less share of new registrations under the FIT.

So, in answer to the question, do the statistics support these views, the answer is both yes, and no.  Commercial-scale installations have definitely become a more significant part of the total, and are likely to continue to do so as electricity prices rise and tariff levels decline, but the domestic installation market is far from unimportant.