The Solar Trade Association (STA) has welcomed the proposal announced by the Department of Energy and Climate Change (DECC) to increase support for solar thermal through a new tariff review under the non-domestic Renewable Heat Incentive (RHI). The proposal includes a measure to increase the current non-domestic solar thermal tariff from 9.2p to between 10p and 11.3p per kilowatt hour (kWh).
“Commercial solar thermal has had a very low uptake to date, mainly due to the low tariff which was restricted by the methodology behind the ‘value for money’ cap” said STA Chief Executive Paul Barwell. “We are pleased that our lobbying has resulted in a change in approach to the cap methodology and congratulate the RHI team on its efforts in improving the level of support.”
Spending on renewable technology is allocated according to the spending given to offshore wind which is the government’s ‘marginal technology’. The DECC consultation explains how the calculation of the tariff for solar thermal takes account of measures besides direct subsidy from the Renewables Obligation (RO) such as Levy Exemption Certificates, the value of the Carbon Price Floor and the European Emissions Trading Scheme (ETS). Solar thermal has been receiving the maximum tariff possible under the old cap, which is not enough to kick-start the market. The raising of the cap, and thus also the tariff, should give a much needed boost to the market.
The STA has proposed that the government should also make the non-domestic RHI a seven-year scheme rather than the current 20 years in order to bring it in line with the proposed domestic RHI.
“We look forward to presenting a strong case to DECC that with the kick-start of Government support for solar thermal at a meaningful level, this highly popular form of renewable energy can make a full contribution to the UK energy mix” said Stuart Elmes, Chair of the STA Solar Thermal Working Group. “Scale efficiencies in deployment, investor certainty on the level of savings and rising fossil fuel prices will enable the industry to chart a path of reducing Government subsidy. The realisation of the full cost of Government support for offshore wind also impacts on the domestic RHI. It should enable DECC to implement a higher tariff for domestic solar thermal when the RHI launches next spring than had been proposed in last autumn’s consultation.”
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