Peter Dilks, Shakespeare Martineau
The government recently unveiled some of the detail surrounding the Future Homes Standard that mandates all new build properties must soon be fitted with solar panels and a heat pump, or form part of a heat network, in an effort to help address both environmental goals and the cost-of-living crisis. While there are transitional arrangements in place until 2027, a portion of the legislation has already been implemented. While this will no doubt go some way to contributing to Net Zero 2050 and aim to lower energy bills, it presents new challenges and questions for the industry and, arguably, the changes do not address key elements of renewables policy which could have maximised its impact.
The effectiveness of solar panels on homes can generally assist in two ways. Firstly, by powering the home itself and reducing energy bills, which in turn reduces demand from other, non-renewable energy sources. Secondly the solar panels have the potential to put excess generated electricity from renewable sources back into the grid itself. It is this second point where the plan, as it stands, is unlikely to deliver anywhere near the potential of what was first envisaged by the legislation. This stems from the well-known conundrum, that when the grid was constructed almost 100 years ago, it wasn’t designed to support a myriad of microgeneration ports. Capacity in the grid to handle exported electricity is limited, and while the effect an individual home connecting solar panels is negligible, the cumulative effect of thousands of homes connecting to the grid is potentially problematic for the stability and balance of the grid, as well as putting strain on the existing infrastructure.
Although modernisation of the grid is underway, with The Great Grid Upgrade set to be complete by 2030, much of the focus is on making it carbon neutral rather than getting ready for a large number of new microgeneration ports. The government’s policy is set to be enforced from 2027, putting pressure on the sector to work out how to support this policy quickly. Planning at this scale, and with a piece of infrastructure as crucial as the grid, should not be rushed or it could risk damage or downtime.
Due to the issues of exporting electricity from thousands, if not millions, of homes into the grid, the Future Homes Standard, does not mandate the export of excess electricity generated from the solar panels. To do so would have delayed an already creaking housing system which isn’t delivering new homes at the pace required to meet ambitious targets and address the housing crisis, by adding grid constraint issues to this dilemma. So, this begs the question, why did the legislation overlook the mandatory installation of electricity storage as part of the solution here?
It is obvious that, due to grid constraint issues, exporting electricity to the grid is not a feasible solution at this time, however, without a storage solution, renewable-generated electricity is simply going to be wasted at times of peak generation and grid demand will continue to be high during peak periods. Smart meters will help decision making for homeowners, and no doubt many will choose to install storage solutions such as batteries, but to implement a mandate to install solar panels without also requiring them to have the ability to either connect to the grid or to store excess electricity, is going to have a hugely undermine the strategy’s effectiveness.
Heat pumps present fewer challenges, as the technology is already established in the UK, if not popular. The main reason that they haven’t been more widely adopted is a large upfront cost, especially when compared with gas boilers. The government mandating developers to use them will ensure that the technology is utilised, and the environmental and financial benefits will be realised in time.
The main challenge will be ensuring there are enough skilled workers able to install and maintain heat pumps. While not a legal requirement, an installer must be certified by the Microgeneration Certification Scheme (MCS) to qualify for government grants. As heat pumps have not been as popular as boilers, there are fewer certified installers available and with demand about to spike, construction projects may well be delayed due to squeezed resources.
While this policy is well-intentioned, it seems that its effectiveness will be limited and potentially should have been delayed or amended to ensure that excess electricity could either be exported or stored. The government is clearly trying to use this policy to reach environmental goals and ease the cost of living crisis, which no doubt are two very important issues that need to be tackled. However, the grid is so critical to the running of the country, that it simply cannot be an afterthought when implementing policy.
