Ofgem has published details of automatic reductions in support for solar PV of 3.5 percent after nine months even if little solar capacity has been installed. The new Feed-in Tariffs (FiTS) will come into force in May however the domestic (and small commercial) sector will not be affected.
However, the Solar Trade Association (STA) is concerned about the 250kW to 5MW tariff band where very few installations have taken place. Ofgem data shows just 9MW of schemes for large commercial/industrial sites have been built since August last year and just 6MW of community-scale solar. Support of 7.1p/kWh have proved to be too low to kick-start the market and yet DECC is planning to reduce it in May to just 6.85p/kWh. This will put this important sub-sector of solar further out of reach.
The 50kW to 250kW band is another sub-sector which should really see major growth but is only seeing modest deployment and which therefore also needs to take off. Medium and large-scale solar roofs of up to about 1.5MW in size are a major feature of overseas solar markets, presenting excellent value for money and being cheaper than other renewable energy technologies supported by governments. Yet non-domestic roof-mounted solar is being suppressed in the UK, firstly because the tariff was set at an uneconomic rate under the new FiTS control mechanism last August and secondly because the expansion of non-domestic solar is constrained by overly tight capacity allowances. With even a modest increase in support the medium and large-scale roof sector would take off while still be cheaper than other renewables. Consequently the STA has now written to Energy Minister Greg Barker urging him to unlock the potential of the large-scale roof sector under FiTS.
“Larger solar roofs are very cost effective and have a major role to play transforming choice for businesses, communities and public sector actors in the electricity sector” said Leonie Greene, STA Head of External Affairs. “If we are serious about Electricity Market Reform and value for money in the UK, then the tremendous potential of big solar roofs needs to be unlocked.”
DECC Ministers are currently considering an increase in maximum capacity for FiTS under the Energy Bill but the STA is concerned that failure in the existing bans requires more urgent attention. DECC had previously sought to address the problem through a separate band in the Renewables Obligation (RO) for roof-mounted systems.
“It makes little sense to be looking at increasing the maximum size for FIT-eligible solar projects when it is clear that it is the existing large-scale roof sector that urgently requires attention” said STA CEO Paul Barwell. “While DECC have sought to recognise the large-roof sub sector under the RO, the FIT is the best mechanism for actors in the commercial, public and community sectors, who need a user-friendly support scheme. We're in danger of developing an illogical and messy policy framework if we don't deal with the obvious failures under the existing scheme. I urge Ofgem and DECC not to degress these FIT bands in May. We will be writing to Ministers again to explain the importance of these sub-sectors. Furthermore non-domestic solar should not be subject to tight capacity constraints given how cost effective it is now. Constraining its growth, while supporting more expensive technologies, is unfair.”
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