Why solar may not be the solution to our energy crisis

It was with great interest that I read reports about the proposed solar farm near Witney, which said that the complex “could power 40,000 homes”.

Although the reports did correctly state that the power from the solar farm would actually not directly supply anyone’s home, Witney or elsewhere, but would rather be sold to the National Grid, adding to our overall supply of electricity; I found how the facts were presented somewhat misleading.

As a former head of valuation at RWE, the company which owns npower and who works today for a financial institution dealing with energy companies, I would like to offer some clarity on the impact upon consumers if councilors approve this plan.

Although light from the sun is free, the price per kilowatt hour of solar remains very high.

Given our hours of sunlight and weather conditions, the price of electricity generated by a solar array can be 13 times greater than combined cycle gas turbines as run at power stations like Didcot.

Coal-fired stations, like the old Didcot Power Station, are even cheaper per KWh generated.

Given the vast difference in the cost per installed kilowatt hour the reader might wonder how such investment may be justified.

The answer is that prices of electricity from renewable electricity fed into the National Grid are heavily subsidised.

The more solar and other forms of renewable energy are constructed, the more they impose costs upon other forms of electricity generation, through having to pay subsidies, through additional system costs of balancing the system when the sun does not shine brightly or the wind does not blow, and lastly through additional transmission infrastructure to connect these small sites to the National Grid.

Of course, all of these costs come ultimately from you and me — consumers.

Thus, while residents of Witney might imagine that the proposed solar installation will reduce our price of electricity, it will actually make it increase.

In Germany, where huge sums have been invested in solar energy, homeowners and consumers are now paying 60 per cent more for electricity than they were five years ago because of the renewable burden. Why, then, do people build such inefficient systems?

Simple, because investors earn an attractive guaranteed price for electricity over many decades, coming from pockets of hard-pressed consumers.

While British Land is correct to worry about the aesthetic aspects of the proposed Witney site, it would be thoughtful if our councilors were to consider the incremental financial impact upon all of us of enduring renewable energy.

Dr Lawrence Haar, who lives in Witney, is a director at UniCredit Bank AG in London