The Social Housing Decarbonisation Fund – A Role for Solar PV

Padiham Near Burnley where 108 electrically heated homes were improved with external wall insulation, new windows and hot water systems, and Clearline fusion roof integrated solar PV by social landlord Places for People

On 19th October, the UK government revealed its much anticipated Heat in Buildings Strategy.  Headline writers entirely focused on only one element of the announcement -  the Boiler Upgrade Scheme, a plan to give grants of £5,000 to people replacing fossil fuel heating by installing a heat pump in their own home.  (See for example coverage from Sky News, Daily Telegraph, The Guardian, The Sun, BBC News).

However the Strategy contained other initiatives which, while less-publicised, better address the barriers to the transition to electric heating - by helping mitigate both their high running costs and expensive installation. These funds aimed at social landlords and Local Authorities takes a more holistic approach since they can also be used for measures that tackle running costs by reducing heating demand and generating power on-site.

The Social Housing Decarbonisation Fund

Less reported, but with a budget many times higher than the headline-grabbing Boiler Upgrade Scheme is the funding announced for the next three years for delivery through Local Authorities and Social Landlords.  The Social Housing Decarbonisation Fund (£800m over three years) is for energy improvements to social housing and the Home Upgrade Grant (£950m) will be administered by Local Authorities and support energy efficiency improvements for low income households.

For the Social Housing Decarbonisation Fund, the approach is summarised as follows:

• Fabric first – heat loss prevention is prioritised before other energy efficiency measures
• Worst first – homes with lower starting energy performance attract more funding
• Upon completion homes must achieve a minimum Energy Performance Certificate (EPC) rating of C and maximum space heating demand of 90kWh/m2.year

It is set up as a competition, with applicants scored on how well they meet the goals above, as well as for deliverability and cost-effectiveness.  The landlord contributes at least 1/3 of the cost of the upgrade with 2/3 coming from the fund.  If a landlord takes the full grant and adds the minimum contribution only, then the amount that can be spent on each type of property is given below.  Landlords can elect to spend more on the property, but the extra is then provided by the landlord.

Starting EPC	Maximum Budget Supported (with maximum grant and minimum landlord contribution)
D	£15,000
E	£18,000
F	£24,000
G	£24,000

These are pretty chunky amounts.

Eligible measures are anything that improves the EPC, with the exception of new fossil fuel heating systems.  Low carbon heating is encouraged, but only after fabric measures have been implemented.  The tenant must be left better off - with lower energy bills.

This is where solar PV comes in -  due to the high cost of electricity compared to gas, replacing gas heating with electric heating will increase energy bills, unless the starting levels of thermal insulation are exceptionally low and can be improved by a very large amount.  (See my earlier blog – Real-World Heat Pump Running Costs)

The complementarity of solar PV and heat pumps is well-understood by social landlords, as can be seen by reviewing the successful bids in the Social Housing Decarbonisation Fund Demonstrator, which were announced March 2021 and I have put into summary form in the table below.

Bid	Award	Number  of homes	Measures
Aberdeen City Council	£2.2m	100	EWI, ASHP, PV
Argyll & Bute Council	£1.2m	130	EWI, ASHP, PV
Clackmannanshire Council	£0.3m	15	EWI, glazing, PV
Cornwall Council	£1m	75	EWI, ASHP, PV
Fenland District Council	£4.5m	160	EWI, glazing, PV
Leeds City Council	£4.2m	190	EWI, ASHP, PV
Barking and Dagenham	£9.6m	230	EWI, ASHP, PV
Manchester City Council	£3.1m	164	EWI, ASHP, glazing
Northampton Borough Council	£3m	150	EWI, ASHP, PV
Nottingham City Council	£2.3m	104	EWI, ASHP, PV
Nottinghamshire County Council	£0.8m	25	EWI, glazing, floor insulation
Kensington and Chelsea	£19.4m	535	EWI, ASHP, PV
Stratford-on-Avon DC	£1.4m	69	EWI, ASHP, PV
Stroud District Council	£1m	50	EWI, ASHP, PV
Sunderland City Council	£0.9m	59	EWI, glazing, PV
Warwick District Council	£1.4m	50	EWI, glazing, floor insulation
Wychavon District Council	£5.8m	236	EWI, ASHP, PV

Key: EWI – External Wall Insulation, ASHP – Air Source Heat Pump, PV – Solar photovoltaic panels

Fourteen out of seventeen successful bids, covering 2,103 out of 2,342 (90%) of the properties to be improved have solar PV among the measures to be installed.  In fact only one project (Manchester) is installing ASHP without PV.

With a total cost of £62.1m, the demonstrator projects grant component is an average of £26,000 per property – higher than the current ceiling, but due to solar PV being such a cost effective way to improve EPCs, it is likely to remain a feature of projects in the future waves.

This system approach to improving properties comprising significant improvements to insulation to lower heat demand, and combining low carbon heating with solar PV to keep a lid on the energy bills for residents seems far more sensible than a crude upfront grant to help cover some of the extra costs of the heat pump installation alone.

That winning combination of heat pumps and solar PV is well-understood by experienced practitioners of energy retrofit working in the social housing sector.  By contrast, owner-occupiers encouraged by generous grants to install heat pumps may find themselves on the phone to their local solar PV installer soon after their first electricity bills land on the doormat.

Where Next for Solar PV Efficiency?

Source: NREL

In the early 1990s a research team led by Andrew Blakes and Martin Green at the University of New South Wales (UNSW) in Australia was working to reclaim the world record for the most efficient monocrystalline solar cell. The group had led the way throughout the 1980s, with a series of record-breaking developments that drove the efficiency of energy conversion in laboratory-made samples of solar PV cells from 18% in 1984 to 20% by 1986 but had lost the lead to a competing team from Stanford University in 1988.

In 1989 the UNSW group reported a new type of solar cell design- called a Passive Emitter Rear Collector (PERC) Cell, with an efficiency of 22-23%, reclaiming the world record for the team.

Throughout the 1990s improvements to the PERC cell technology made by the team increased the cell efficiency to 25%, a record that would stand for 15 years.

Fast forward to 2015 and PERC solar cells had made the transition from laboratory curiosity to deployment in mass-produced solar panels.  Over the next few years, PERC has come to dominate the solar market.  In 2019 all newly installed solar cell manufacturing lines were based on PERC technology, and PERC accounted for 65% of all solar cells manufactured.

What we can see from this history is that although the laboratory development work on PERC cells was completed by 1999, it took another 16 years before products based on the technology appeared in the market.  

We can also see from the chart that between 1999 and 2014 there was no further progress in advancing monocrystalline cell efficiency in laboratories around the world.  If recent record-breaking advancements take the same length of time to graduate from research devices to volume manufacture, we’ll be waiting until 2030 before they start to appear in commercial solar panels.

It may well be that due to the massive growth of the solar industry in the intervening time, current research budgets are far greater than those in 1999 so we might not have to wait for 16 years, but undeniably the introduction of PERC could represent a plateau in the relentless march of solar cell efficiency that has been a feature of the solar PV market for many years.

How Have Panel Manufacturers Responded?

With customers that have become used to panels that increased in power output each year, manufacturers have resorted to what might look like a cheap trick.  If the cells aren't getting any more efficient, let's make the panels bigger.  A proliferation of different cell formats and panel sizes has emerged.  See my earlier blog on panel and cell format proliferation.

This not-so-subtle sleight of hand has obscured the fact that technology has stalled.  Although panel powers are increasing, the specific power (power per square metre) is rising only slightly and due to more efficient packing of the cells into the larger panels.

However there is a limit to how big you can make a module before disadvantages in handling and ease of installation begin to offset and eventually exceed the benefits, especially in rooftop solar where mechanical handling is less easy to arrange.

Where Next for Solar Cell Efficiency?

The challenge for researchers seeking solar cell efficiency gains is that cells are already getting close to a brick wall - the Shockley Queisser limit.  This theoretical efficiency limit is based on physical laws.  For a single junction p-n semiconductor monocrystalline silicon cell like those in use is solar panels today the limit is 32%.  With lab cell efficiencies of 26.1%, the current record of is already 81% of the maximum it could ever be.

Some industry participants point to HeterojunctionTechnology (HJT) Cells at the successor to PERC.  Introduced by Sanyo in the 1980s and acquired by Panasonic in 2009, HJT solar cells currently have a world record efficiency of 26.7%, a little higher than PERC cells, but these cells have a similar theoretical efficiency limit based on a single p-n junction.

One way to break free of the theoretical efficiency limit is to create a cell containing multiple p-n junctions, each tuned to different wavelengths.  A broader range of wavelengths of light can then be converted to electricity. 

Among those exploring a multi-layer cell, one approach called a tandem perovskite cell looks closest to commercialisation.  (See for example Oxford Photovoltaics).  A thin film of photovoltaic perovskite material is laid down on the surface of the silicon cell.  The perovskite skims off energy from one set of wavelengths of light and allows the rest to pass through for conversion by the silicon cell below.  Efficiencies approaching 30% have been achieved in the laboratory and importantly the rate of improvement is rapid suggesting that there may be further improvements ahead.

Source: NREL

The problem facing any challenger technology is to overcome the inertia from huge investments in existing manufacturing plants for crystalline silicon cells and to prove to customers that the next new thing will have an equal lifetime.   What is interesting about the approach of the tandem perovskite cell is that it literally builds upon the well-proven crystalline silicon cell by adding a new layer.  Existing plant could be modified rather than scrapped, and the job of proving longevity is made slightly less challenging.

The rapid emergence of a global solar industry has been driven by a reducing cost of energy generated by solar, by pushing ever lower the cost per watt-peak of PV modules.  The twin engines of technological improvements to cell energy density and scale efficiencies have worked in concert to push this cost per watt-peak down year by year.  

Now it is looking like the cell technologies that have got the industry this far are approaching their limit.

Until today's breakthrough cell technologies make the journey from lab bench to mass production like the inventions of the UNSW team, the solar industry is going to have to rely more on economies of scale and manufacturing efficiencies to drive improvements.