The business leader's guide to the low carbon economy

An interesting spat has broken out between eco warrior George Monbiot, and businessman Jeremy Leggett, founder and CEO of Solar Century, a company which produces solar panels for electricity and hot water.

The government recently announced that anyone who puts a solar photovoltaic (PV) panel on the roof of their house will be paid 41p for every kilowatt hour of electricity they produce – even if they use the electricity themselves. This subsidy, known as a feed in tariff or FIT is guaranteed for 25 years, making the purchase of a solar PV panel a very appealing investment. For an outlay of around £12,000, you can probably expect a guaranteed tax free return of about 5-8% a year. No other risk free investment on offer at the moment comes anywhere close to that.

It’s probably clear why Jeremy is a fan – his company makes solar panels. But why doesn’t George think much of it? According to Mr Monbiot, the scheme (a) won’t make much of a difference to the total amount of power generated by renewables (b) will generate power at the wrong time (in the UK we don’t use much power on sunny days – peak usage is dark winter evenings) and (c) will make the middle classes who can afford the upfront investment better off while doing nothing to address fuel poverty.

Of course he’s right on all three counts, but this won’t stop the government continuing with the scheme, and neither should it.  In a low carbon economy, most electricity will be generated from renewables and nuclear, and much of it will be generated locally rather than in big centralised power stations. The sooner we move to a low carbon economy the better, and that means trying a lot of things to see what works. Domestic photovoltaics may or may not be a significant source of Britain’s energy in 2020, when we have to reduce CO2 emissions by 34%, or by 2050, when we have to reduce them by 80%. But we won’t know unless we try, and that means getting started now.

For more about Monbiot and Leggett, see http://www.monbiot.com/ and http://www.jeremyleggett.net