Thursday, 19 August 2010

Feed-in-measure opens space for PV innovation

Many people are beginnig to appreciate the opportunities presented by the new feed-in-tarrif for small electricity generation in the UK (less than 5MW). Solar photovoltaics, one of the case studies in our project, is benefitting in particular. The numbers of installations have exploded.

What is striking about this new measure, aimed at protecting these nascent smaller-scale energy alternatives, is the way they are generating non-technical innovations too. New business models are emerging, in which developers install panels onto (appropriately sited) houesholds for free. The households receive rediuced electricity bills thanks to the 'free' solar electricity, while the developers profit on their investment by collecting the feed-in-tarrif.

Protective space for developing solar photovoltaic energy rested for many years in subsidies for research and development, and applications in remote locations isolated from electricity grids. This allowed certain forms of experimentation and development of solar photovoltaic configurations, such as stand-alone units, and improvements in the core technologies. Subsequently, a series of grant-funding programmes made it possible for wealthier and prestige users to install solar photovoltaic technology within grid connected configurations (despite unfavourable electricity infrastructures and institutions). This identified reforms to the rules and charges for grid connection that would make this form of solar electricity easier to practice.

The recent feed-in tarrif (effectively subsidised through general electricity bills) alters the protective space again, and permits the wider diffusion of this technology. Innovative business models are emerging. Once again, the construction of protective space soon elides into nurturing niche development, with consequences for its future socio-technical configuration. However, some argue it is still better for households to own the panels themselves, assuming they can afford the investment. The feed-in means that this is open to more households than before.

This is significant for our research interest into the way 'protections' (from competition in 'open' markets) for low carbon technologies are won from government (and others), and what this means for the development of those technologies. Solar PV is the first of our case studies, so we will be considering this latest development in depth and in historical perspective.

Spain recently had to cut its feed-in tarrif for solar by 45 per cent, as the cost on energy bills was escalating due to high demand and installation for solar. So protective measures can be withdrawn as well. We'll have to wait and see what this means for the future development of this technology ...