Soaring solar demand in Germany leads to unforeseen circumstances in UK

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The fledgling UK market for solar energy, since the first feed-in tariff was introduced in April is struggling to take flight due to the severe lack of high-efficiency PV modules and inverters. It was hoped that the acute shortages would ease after the German FiT changes due July 1 would see a significant slowdown in demand, loosening supply of the required modules and components for the UK market to flourish.

That would now seem to out of the question, according to a new report from market research firm iSuppli. Demand in Germany is set to continue soaring not only in 2010 but actually grow significantly more in 2011.

With similar climate and irradiance conditions as Germany, the UK residential market requires high-performance modules and the most efficient inverters for consumers to maximise their return on investment via the FiT.

Currently, there are many modules certified for the UK that are simply not available. Many of those that can be supplied are priced at a 50% premium and more compared to prices being quoted in the dominant global market of Germany.

A key concern is that multicrystalline modules in the range of 170W are being touted as availability exists, yet rooftop sizes in the UK often dictate that 200W modules and above should be installed for the right ROI.

When high-efficiency (mono- and multicrystalline) modules are available, there is a significant price premium over less-efficient models, pushing out the ROI past 12 years in many cases.

The UK market is severely lacking the high-quality, high-performance modules necessary, and consumers are therefore not being offered the optimal ROI packages.

In a bizarre but troubling development, our sister website, SolarPowerPortal, has discovered that counterfeited modules from Hong Kong have entered the UK. Though there is no threat that these will actually be installed since the modules’ false identity has been found out, there is a real and sinister threat developing in the country that could put off consumers from installing solar.

In even tighter supply are solar inverters, which have been in acute short supply globally since the third quarter of 2009. Although leading inverter manufacturers have boosted production capacity, there is a major downstream shortage of semiconductor components. These shortages are more structural and will take most of this year and perhaps longer to be truly brought back to a manageable supply-and-demand balance.

The problem has been exacerbated by another discovery that some transformerless inverters imported into the UK require secondary earthing, which adds further costs to total system installations.

As reported by Which? there are illegal sales practices and overpriced solar thermal hot water systems being peddled, as consumers are not fully aware of the technology. Many companies in that market are now registered solar energy installers, and the concern is that solar energy will be tarnished with the same brush.

The acute shortages of solar systems are only increasing the threat of poor practices that could damage the fledging UK market irreversibly.

28 September 2021
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