Solar PV

Solar PV is well-established, and proven to be financially viable without Government incentives. The best economic return occurs when the generated power can be used onsite, replacing electricity which would otherwise be imported from the grid.

Probably the most recognisable and established of the technologies available, Solar PV is undergoing a quiet revolution. Installing panels to improve efficiency and reduce cost is becoming a standard part of many buildings and projects.

Solar PV has been supported historically using the Feed in Tariff (FiT) mechanism that the government provided between 2008 and 2018. Consequently, many people believe that solar PV does not have an economic case. 

However, the capital cost of solar PV over time has fallen significantly, with the installed cost of solar PV falling sharply between 2007 and 2012, and continuing to decrease steadily after that.

This means that economic viability is no longer purely dependent on government subsidy and a good case can be made for installing solar PV without FiT support. When solar PV energy can be appropriately managed, the paybacks can be as short as 6-7 years.

A fully installed cost of £500 /kW would value the electricity produced over a 20-year lifetime at approximately 3 p/kWh.

Even if you wish to value this over a much shorter return on investment period, say five years, this would be around 12 p/kWh, which is often better than daytime electricity price.

Therefore, the economics are favourable where systems are designed to match the potential to fully offset site electricity consumption.

The importance of load matching and load shifting

The best economic return for solar PV is where the generated power can be used onsite when it would otherwise be imported from the grid. This will only happen when loads are of a similar scale and occur during the daytime (especially where there is a heavier reliance in summer, for example in cooling applications).

If panels must be mounted with a non-south-facing aspect, then matching loads to the morning or afternoon period (as appropriate) will be important too.

Ideal installations and load matching cannot always be achieved, especially in typical dairy farm profiling which is early morning and late afternoon dominant.

However, there are opportunities for load shifting of water heating or ice building to make the most of the generation during the peak of the day - this is offsetting night rate electricity, so economics must account for this.

Is battery storage the answer?

Where a temporal mismatch still exists, battery storage could be a solution. However, battery storage, i.e. keeping electrical energy for use later, is not always the most appropriate and cost-effective option.

Another solar PV approach could be to create loads that only operate when additional energy is available. This could be running pumps for moving water or slurry around the site, or in some cases creating hydrogen or other forms of useful product that could be used later. The economic case for these systems only exists where the products can be useful to the site or sold to create an additional income, otherwise, energy is wasted.