Bristol’s cabinet last week gave the go-ahead for the first phase of a £47m programme to install solar panels on 7,000 social homes in the city, in a move seen as part of a renaissance of the large scale PV contracting market.
Mayor George Ferguson signed off the £6m project using funds from the Public Works Loan Board, triggering one of the biggest solar PV projects since the Feed-in-Tariff (FIT) was cut in November 2011.
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An “early information” procurement notice for contractors, installers and suppliers has already been posted by the council. According to the notice, the £47m deal is split into four lots, with the largest being social housing.
The notice also says the council is putting together a framework also designed to be used by other south west councils and public bodies, such as universities, schools, NHS and registered social housing providers.
Simon Green, group head of sustainability at contractor Lakehouse, welcomed Bristol’s move into the market, and said that it was “seriously considering” tendering.
“Because of mass production in China, the unit cost of the kit has come down considerably and with the feed-in tariff the same as it was, then if you have a large enough project, the rate of return is as big as it was before.”
Simon Green, Lakehouse
“They’re looking for a main contractor, but one that has all the relevant ISOs and accreditations for solar installations. We also have our own in-house design team, and there aren’t many contractors that have that capability,” said Green.
Carillion, Wates and Willmott Dixon are among the contractors with similar capabilities.
Landlords turned away from the FIT regime after the government slashed the subsidy payment, intended to incentivise the take-up of PV, from 43.3p per kilowatt hour to 21p in November 2011. Many councils and housing associations dropped their solar plans on the grounds that schemes were no longer viable.
But Green added: “Because of mass production in China, the unit cost of the kit has come down considerably and with the feed-in tariff the same as it was, then if you have a large enough project, the rate of return is as big as it was before.” He estimated that a project needed a value of £1m, or involve retrofitting 500 to 700 homes, to be worthwhile.
“The market died 18 months ago, but we have definitely seen a lot more interest, and in the policy issue of fuel poverty. We’re hearing about major social housing landlords resurrecting the plans they shelved two years ago.”
Bristol Council, which oversees 28,000 homes, claims bundling panels into bigger programmes enables economies of scale and drives costs down, making the investment viable.
The council used a low borrowing rate of 3.6% from the Public Works Loan Board to fund the first part of the project.
The BBC news website reported George Ferguson as saying: “It represents significant investment in solar photovoltaic. But it has now become a proven technology, it’s more economical and we benefit from the feed-in tariff. It is £6m very well invested and will reap profits down the line once the capital is paid off.”
Bristol wants to become completely solar powered in the next seven years and generate 37.6GW/h of electricity per year by 2020.
News of the deal comes after housing association First Wessex signed a contract with Wales-based installer Dulas to install solar panels on 800 tenants’ homes and its offices and depots over the next two years.
The £4.3m project is expected to save residents, who live in the south of England, between £75 and £150 a year in energy bills and save 1,250 tonnes of carbon annually.
