New technologies and better financing make tackling emissions easier says the IPPR
How to make money from fighting climate change
16th September 2010
Renewable energy presents a unique opportunity for getting communities engaged in reducing their emissions - and benefiting financially - says Reg Platt of IPPR
Before long solar panels could be as common as satellite dishes
If you work on climate change issues it’s hard not to be completely baffled that the ‘is climate change really happening?’ debate was not put to bed years ago. Surely we are all now focusing on the solutions? Apparently not. And this was the case before the abject failure of the international negotiations in Copenhagen, and the climate science ‘scandals’ that erupted in its aftermath, made things a whole lot worse.
Partly as a result of this persistent uncertainty we have seen time and time again that most people are simply not motivated enough by the prospect of climate change to modify their behaviour and adopt lower carbon lifestyles. Climate change is a complex problem: it is invisible, it is the result of the actions of people from across the world, its impacts are long term and it is inescapably depressing. It is entirely understandable that, despite the best awareness raising efforts of the environmental charities and government campaigns, most people continue to prioritise their day to day concerns - such as how much money they have - and enjoying themselves.
Now more than ever we need to find alternative ways of engaging people in reducing their carbon emissions rather than asking them to do it just because of climate change. Renewable technologies, such as wind turbines and solar panels, may be just the answer we are looking for.
Some large-scale on-shore wind turbine developments face nimbyism, but renewables are generally popular. In an ippr survey of 3,032 people in 157 marginal constituencies, conducted before the general election, we found that 44% of respondents agreed strongly or very strongly that we should be generating 15% of our energy from renewable sources by 2015, and only 4% disagreed. Also, in a recent poll of 1,822 adults Ipsos Mori found that 88% of people are favourable towards solar power, and 82% towards wind.
As a response to climate change renewables are an ideal way of engaging people: they are a positive, solution focused step that can be taken in the here and now.
But it is not just the difference that renewables can make to climate change that makes them popular. The survey tested different ways of presenting the policy and found that 10% more respondents agreed strongly or very strongly with the above statement if it was framed as an energy security rather than a climate change policy.
Up until now, the widespread uptake of renewables in the UK has been held back because the technologies have simply been too expensive. If you bought a solar panel you used to have to wait about 35 years to get your money back in reduced electricity bills. However, this has now changed and in addition to the benefits they offer for climate change and energy security, renewables have suddenly become an attractive financial proposition.
In April this year the government introduced a radical policy instrument called the Feed-In Tariff, which means households and organisations get paid for generating renewable electricity. Payments are index linked and guaranteed for 25 years. This has fundamentally altered the economics of renewable electricity with the technologies now offering a reasonable return on investment of between 5 and 8%.
In Green Streets: Exploring the potential for community energy projects, a new report and accompanying research by the institute for public policy research and British Gas, we illustrate the financial opportunity that renewables present for community groups.
We estimate that through the Feed-In Tariff solar panels on pubs could generate around £15 million, village halls £10 million, community centres £8 million, churches and other religious buildings £25 million, schools £35 million and swimming pools £3 million. In addition the buildings will be able to use the electricity the solar panels use for free and sell anything they don’t use back to the grid.
This money can enable community groups to focus less on fundraising to pay energy bills, and instead spend the money on what they are passionate about, improving their communities. For example, one community group involved in the research runs a Lido in Beccles, Suffolk. Working with British Gas the group is having solar photovoltaic panels installed on the Lido building. This will generate an annual windfall of £3000, which will be a vital aid to keeping the organisation’s balance sheet looking healthy.
The introduction of the Feed-In Tariff has kick-started a dizzying amount of innovation in the renewable electricity sector with new start ups and major retailers moving into the sector, bringing new products and offers to market, particularly in relation to solar panels. We are on the cusp of a revolution in small scale renewables and it may not be long before solar panels on houses are as common a sight as satellite dishes.
But there are still barriers to the widespread uptake of the technologies. The high up front capital costs remain the key barrier, although there a range of financing options that either already exist in the market or which are currently in development. Beyond this there are far simpler cultural barriers: most people simply do not understand the technologies or the benefits they can offer.
Our research suggests that having renewables on community buildings could be a way to ‘normalise’ renewable technologies by demonstrating their benefits in practise and making them seem less alien. Their high visibility on community buildings could be a great way to engage a lot of people at the local level and could ultimately lead to an increase in their uptake and a greater public acceptance for more ambitious large scale renewable programmes.
Now is a difficult time to work on climate change. The climate science debate is still alive and kicking and with the public sector finances in dire straights job security and money are far more pressing issues in peoples minds.
Renewables, backed up the Feed-In Tariff, present a major opportunity for getting people engaged in reducing their emissions and we would all be wise to make the most of it.
Reg Platt is a researcher for the Institute for Public Policy Research
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