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Press Release: FITs Market Investment Opportunity - UK Regional Reports

Released: October 2010

An investment window of opportunity has emerged that will be revised in April 2012. MBD have just published the first three in a series of regional reports covering the Retrospective Solar Panel PVs Feed In Tariff Market Investment Opportunity in the residential market.

Analysis of the potential opportunities for the retrospective fitting of solar panels is complicated by many issues specific to the exact location. While inverter and cable losses are more common, and panel pitch is more regular, issues such as temperature losses and angular reflectance, irradiation, orientation of the roof and roof size are more specific. That is why MBD have surveyed a random sample of 202 357 roof analysis of the UK in compiling these reports.

Each report has detailed market analysis including the orientation of domestic roofs, segmented between detached, semi-detached and terraced housing. Moreover, each report contains detailed costings on installations by roof orientation (south west, south-south west, south, south-south east and south east, and those less suitable). The reports identify the market size, by orientation and type of house and provide analysis of the pay back periods and returns on investment for commercial investors.

The Market Background :

The retrofit solar PV installation of up to 4KW has been determined at a FIT of 41.3p per KWh for installations made up to 31/3/2012, and this will last for a 25 year duration, and the level has also been index linked. In addition there is an export tariff of 3p per KWh. The household with the installation also makes savings on its electricity bills, because generating electricity means the household does not have to buy as much electricity from the energy supplier.

The Market Opportunities:

There are a number of different scenarios of opportunities:

Firstly the tariffs have been set to profitably and safely (payments are inflation linked) facilitate a houseowner taking a loan to make the investment themselves and so a major loan/mortgage market emerges.

Secondly, companies are emerging that are offering to undertake the installation entirely free to the householder, making the installation free to the householder in return for effectively “renting the roof”. These companies are offering the householder the benefit of the free electricity used on site for 25 years and then ownership of the system thereafter. The capital outlay of the company is repaid with profit from the income derived from the generations and export tariffs. Effectively this is the development of a corporate market. These are capital intensive activities, offering investment opportunities, with inflation proofed returns. Ultimately these companies make ideal pension plan/long term investments.

Thirdly, local authorities, with portfolios of properties have a major opportunity to derive a new revenue stream.

In the first four months of the operation of FITs (ie April to July 2010) according to Fitariifs there have been 4429 domestic installations in the UK, providing a combined installed capacity of 11.111 MW, equivalent to an average installation size of 2.5 MW, but the government is targeting some 750 000 houses. What makes the opportunity all the more exciting is that it is not funded by the government and so will not be subject to government cutbacks - the FIT Scheme is not funded by the government but by the power companies. They are obliged to pay the tariffs following legislation brought in by the government.

Regions Covered :

The South West of England
Yorkshire and Humberside
The North East of England
London
The South East of England
East England
West Midlands
East Midlands
North West England
Wales
Scotland

Note to Editors:

MBD specialises in business to business market research. The range of reports and industries in which we operate in is constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

Click here for full details of the FITs Market Investment Opportunities Regional Reports

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