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Incentivising solar capture and battery storage could help tackle fuel poverty, says expert

The UK government should consider incentivising the adoption of domestic solar panels and battery storage technologies as a means to cut fuel poverty, a specialist in energy contracts has said.12 May 2017

Becca Aspinwall of Pinsent Masons, the law firm behind Out-Law.com, said there were a number of options the government could look at to incentivise the switch to the new technologies and said the measures could help reduce consumers' electricity costs.

Incentivises could include providing cash back or 0% interest loan offers to homeowners that install solar panels with battery storage technology, Aspinwall said.

The government could also promote 'rent-a-roof' solutions, where the cost of the solar and battery technologies are covered by a third party in exchange for a commitment by the homeowner or tenant to buy the electricity generated from and assign any renewable subsidies to the third party.

"It used to be that you could finance the solar panels solely on the subsidy revenue so that the energy generated was given to the homeowner for free, but this is no longer the case," said Aspinwall. "However, the price of buying electricity in this way could still be cheaper than sourcing it from energy suppliers, particularly if government incentives for both solar and home energy storage solutions were offered as a package."

"Home energy solutions essentially involve installing a battery into your home to store the electricity generated by the solar panels and not immediately used," Aspinwall said. "This allows the battery to charge up during the day when the sun is shining and for the battery to discharge in the peak early morning and evening times."

"Because most people are out during the day when the solar panels are generating electricity, a lot of the energy generated is currently just exported to the grid instead of being used in the home. There are already various companies offering home energy storage batteries in the UK – these include Sonnen, Moixa, Tesla and Powervault," she said.

Aspinwall said solar panels together with battery storage technology has the potential to enable homeowners to generate enough electricity to power their own home and even sell excess electricity generated and stored to others in their area through localised virtual networks. She said blockchain technology could be used to support such local distribution networks and lower the cost of electricity to people within an entire community.

Aspinwall said, however, that increased use of solar and battery storage solutions could significantly disrupt the existing electricity market.

"If every household had solar panels and a battery, the need for energy from the grid would be greatly reduced and the traditional electricity peaks – early morning and evening – would be flattened," Aspinwall said. "This could increase the cost of electricity and disrupt the need for the capacity market which is designed to react to fluctuations in frequency on the grid."

"I suppose the question is at what point there would be an impact on the market – how many homes would need to have solar and battery technologies installed for this effect to be created?" she said.

Housing associations are among the organisations already exploring commercial models that support the use of solar and battery storage technologies, Aspinwall said.

Aspinwall was commenting after UK prime minister Theresa May recently outlined plans to impose a cap on the amount electricity suppliers would be able to charge their standard variable tariff customers. The measure, designed to address rising energy prices, was promised as part of May's bid to remain prime minister following the forthcoming UK general election.