Social landlords missed out on the solar boom, but can still benefit from the next generation of green incentives, says Owen Daggett
Somewhere on the east coast mainline from York to London eagle-eyed passengers will spot a farmer’s field that isn’t full of crops or cattle, but instead is home to a solar photovoltaic farm. A field that is now full of solar panels which generate electricity, some of which may help to reduce the farmers electricity bill, but most of which will be sent back to the National Grid to provide power to a nearby home or business.
No doubt the farmer recognised the financial benefits of the feed-in tariff scheme when it was introduced and maximised their earnings by installing the system. Initially, take up elsewhere was huge (up until a much-published change in the policy). The scheme not only produced financial savings and higher returns than most high street banks, but also reduced electricity bills and cut carbon emissions.
But how well was this opportunity taken up in the social housing sector? New research findings from JRF show that on the whole social landlords missed out on the solar PV boom.
Why was this? It’s not as easy for a landlord to commit large sums of money to such a scheme in a short amount of time. Legal agreements, technical surveying of stock, resident engagement and programming of works all take time. And where would the money come from? Most landlords found their resources were committed to delivering the basics of decent homes without any surplus to consider on the ‘bling’ of solar PV.
While landlords were in the midst of these vital stages of planning schemes, the changes to the FIT rate were announced which ground most, nearly all, of these projects to a halt. The subsequent lack of clarity ensured that most landlords retired their PV plans to the recycling bin.
Should we abandon hope? The research findings showed that installing the panels had significant potential to reduce electricity bills of low income households. In terms of fuel poverty the installation of PV could be a measure that could move some households out of this poverty trap.
For most social landlords, FITs represented a means to directly assist large numbers of households with the benefit of PV panels. The surplus income generated from the FITs could be shared equitably amongst other households in terms of other improvements to their homes, such as costly external wall insulation. Ultimately for some, FITs were a catalyst to a roll out of retrofitting homes to low carbon standards.
Where are we now? FITs are still alive, albeit in the form of a less attractive financial package. But most people recognise that FITs in their early form were unsustainable in the level of return they offered. But now we find ourselves with PV prices at a quarter of what they were two years ago. Although still relatively expensive, hopefully now they can be included in landlord’s investment plans, along with all the other home improvements.
So there are positive to take from this. The challenge moving ahead for landlords is how they can take their experiences of FITs and turn these into positives. And with the green deal on the horizon, there are many new challenges that will require a new way of thinking from the affordable housing sector.