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It’s Always Sunny In England

Patrick Eden/Alamy

The mid-September forecast for Plymouth, England, a city in Devonshire, on England’s southwest coast, looks typically bleak. Mostly cloudy Monday through Wednesday, cloudy Thursday, overcast Friday, and considerable cloudiness over the weekend.

But in the towns, villages, and farmland of Devonshire, hundreds of thousands of solar panels will be producing electricity amid the gloom. In fact, Devonshire has more rooftop solar installations than any other region in England.

The rest of the country is no slouch when it comes to solar, either. In August, NPD SolarBuzz reported that the U.K. has surpassed cumulative installation of 5 gigawatts—more than five times the total at the end of 2011. For comparison’s sake, the U.S. had about 13 gigawatts of solar installed at the end of 2013. This, despite the fact that the U.S. has about 40 times more land than the U.K. Last year, the country’s installation of 1.45 gigawatts of solar capacity, made it the world’s sixth largest for new installations.

How can it be that a small island notion, known for its miserable weather, perpetual gray skies, misty moors, and rain-addled cities can be a leader in harnessing the power of the sun?

Two reasons. First, it turns out that when it comes to transforming light into electricity, will can be more important than natural resources. Second, building a viable solar industry is as much about financial and policy engineering as it is about electrical engineering.

The reality is that the main requirement for solar power isn’t so much sun as it is daylight. Yes, solar panels are most productive when they’re exposed to many hours of strong direct sun rays—which is why the biggest U.S. installations are in the Arizona and California desert. But in northern climates, exposing panels made up of solar cells to light, connecting them to the electrical grid, and producing emissions-free power works just fine.

In the U.S. for example, California and Arizona, not surprisingly, lead the 50 states in the amount of solar-power capacity installed. But third place belongs to. . . New Jersey. And in 2013, Massachusetts, whose weather often resembles the nation from which its founding pilgrims hailed, installed more new solar capacity than 47 other American states. In Europe, Germany has far more solar power capacity than sunny Italy.

The reasons have largely to do with government policy—incentives and targets put forward that have guaranteed a market for solar-produced electricity and helped create a healthy market. Among the most popular policies are feed-in-tariffs, which require regulated utilities to purchase the output of solar, or wind, or other energy, at a fixed price. Another popular method is issuing certificates to producers of renewable energy that they can sell to utilities, who are required by law to generate a certain percentage of their power from renewable sources.

The U.K. originally hung back from embracing such policies, and as a result was a laggard in developing a solar industry. But in recent years, a combination of several factors has propelled it into a leader.

Over the last several years, the price of solar panels—and hence solar installations—has plummeted, thanks to rising competition, excess capacity in China, and savings that accrue due to volume manufacturing. Solar Energy Industries of America, a trade group, says the average price of a solar panel has declined by 60 percent since the beginning of 2011. The sharply lower price—combined with lower borrowing costs thanks to falling interest rates—has made investing in solar systems more attractive everywhere in the world.

At the same time, the U.K has adopted policies that have stimulated growth. The U.K. has adopted a healthy feed-in tariff that guarantees solar system owners an attractive price for the energy they produce.. (Data on the level of feed-in tariffs can be seen here. “The FiT [feed-inrate turned out to be among the most lucrative offered to any PV industry,” noted Finlay Colville, vice president at NPD SolarBuzz. Feed in tariffs. And for the last several years, people and companies who develop solar electric systems have been eligible to receive Renewable Operating Certificates, which they can sell at auction.

But policies and cheap raw materials are useless if businesses fail to take advantage of them. And in the U.K., dozens of small and large companies have sprung up to serve the market. One of the most prominent is Lightsource Renewable Energy. Founded in 2010, the company aggressively courts farmers, landowners, owners of commercial buildings and homeowners with an offer to build solar farms on their property. Billing itself as an environmentally-friendly local intent on preserving England’s landscape, it has had great success. As this map shows, Lightsource has some 110 large-scale sites with a combined capacity of 587 megawatts, including a huge 24.7 megawatt farm in the tiny village of Abbots Ripton.

And there’s much more to come. Like the weather, the climate for solar electricity can vary. Changes in the level of subsidies and feed-in tariffs can put a damper on activity. But in England, it’s full-steam ahead. NPD Solarbuzz in March projected that the U.K. could install up to 2.5 gigawatts of new solar capacity in 2014, good enough for fourth place in the world.

The sun may not shine that frequently in England. But it is definitely shining on the solar industry.