The renewable energy market is currently facing some difficulties. Many larger companies in the sector have closed renewable parts of their business and with uncertainty surrounding subsidies investors remain nervous about investing in the renewable market.
Last December BP closed their solar panel ventures after claiming ‘they couldn’t make any money from it.’ Then last month German Industrial Group Siemans pulled out of their solar panel business to concentrate on wind and hydroelectric power. It is not just solar that has taken a hit with European wind energy companies announcing job cuts due to poor trading figures.
Reasons for Difficulties
One of the reasons for closures, such as BP and Siemens, is competition. In a sector that has seen a downturn only the lowest-cost producers are surviving. The competition, particularly from Asian companies, is very fierce so it is not that surprising to see some big names exit the market. Many smaller companies have also filed for bankruptcy.
Another reason for the challenging times is policy change regarding renewable energy. Cuts to grants and subsidies, such as the Feed in Tariff, will deter customers from investing in renewable energy. Renewable energy still represents quite a large investment for most households so cuts in grants and subsidies that boost the market have had an effect. The changes in policy also create uncertainty for investors meaning they are less willing to put money into the market.
Renewable Energy – The Future
Despite testing times for renewable energy, to paraphrase Orange, the future is still very bright. The Government is still committed to making renewable energy a large part of our future. This would still probably be true if another Government was elected and there is a similar story across Europe. Perhaps more importantly than Government and Manufacturers is renewable energy is still important to the most important people – the public and the consumer.
Renewable energy is important to people because they want to protect the environment with a more sustainable form of energy. They also know that in these frugal financial times microgeneration offers cheap electricity that will last in the long-term. Morally and ever-increasingly financially, renewable energy makes more sense. There is no doubt, on all counts, renewable energy is the future.
Green Deal to Boost Renewable Energy
Though the exact details as to how the Green Deal Scheme will work are still unclear there is a good chance that the scheme will cater for microgeneration technology. The Green Deal currently allows consumers to take a loan for home improvement such as insulation with repayment and interest payments only being made from expected savings. So for example if you save £20 a month on your heating bill, you repay less than £20 a month. Unlike conventional loans the loan will be against the property and will be passed on should you move out.
If the Green Deal should be made available for renewable technologies then it would give investors a chance to make bigger returns on investments and give many more consumers chance to generate their own electricity.
In the mean time there is plenty of good news surrounding renewable technologies to encourage manufacturers and consumers. According to recent reports those with solar panels are actually making more money from them despite a dip in FITs. This is mostly down to increased yields and people installing larger systems in their homes.
The increased competition between manufacturers also means the price of renewable technologies is driven down. Prices of technologies are slowly falling and becoming more accessible to all. There is also more information available than ever to research whether your property would suit a microgeneration system before you buy. This will only increase should the Green Deal be made available for renewable technologies, when a Green Deal assessor will analyse the suitability of your property for the system.
Renewable energy may be facing a challenging time but the good news certainly outweighs the bad. The best news of all: that the tough times serve to only prove, renewable energy is still the future.
Hopefully the Green Deal will signal a resurgence in the renewables market because it is definitely a difficult time at the moment with so many big companies pulling the plug on solar divisions. We can take some pleasure in the recent trend for big companies like Ikea and Renault to construct buildings with large scale solar solutions. However more certainly needs to be done to make solar a viable choice for the average person.