Let The Foreigners Pay For The New Battery Technology

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Apparently Britain will fall behind unless we subsidise the installation of lots of batteries. To which the correct response is let’s fall behind and let the foreigners carry the costs.

The UK risks being left behind in Europe’s home battery boom because of a controversial tax hike on solar-battery systems, according to a report.

The worry of falling behind, well, what worry? Because we’re not talking about manufacturing the things – no one does that wort of work here anyway. We’re talking about installation. And there’s no competitive or comparative advantage to be had by having an installation industry. By definition that’s something we’re not going to be trading internationally, isn’t it?

The analysts expect that by 2024, annual home battery installations across Europe could total more than 500MW, the equivalent of building a new gas-fired power plant every year.

Great, we all look forward to it, of course.

However, the UK is likely to lag behind its European neighbours due to its “unfavourable” policy frameworks and a VAT increase for solar-battery packs this October. Rory McCarthy, a senior researcher at Wood Mackenzie, said Germany’s lead had made Europe the largest residential storage market globally.

“Off the back of Germany’s success, residential storage is beginning to proliferate into other European countries, particularly where market structures, prevailing power prices and disappearing feed-in tariffs create a favourable early stage deployment landscape,” he said. “The economics of storage have been challenging in the past, however we are in the midst of an economic tipping point.”

That last there being the point. Currently battery installation is uneconomic. It requires subsidy to become so. Given the power of capitalism and markets of course the subsidy will kick start innovation and we’ll get ever cheaper batteries and installation.

The correct thing for Britain to do? Wait until it’s economic without subsidy then install. We lose absolutely nothing by doing so and gain not having to subsidise. This policy therefore makes us richer and we like being richer.

Let Johnny Foreigner pay the development costs and we’ll do it when it’s nice and cheap. Or, to put it nicely and politely, the battery installers looking for a subsidy can bugger off.