Published on July 6th, 2014 | by James Ayre6
Cuts To UK Solar Incentives Could Slash Future Deployment 30%, Labour Party Warns
July 6th, 2014 by James Ayre
Recent and ongoing cuts to UK solar farm incentives could result in an up to 30% decline in the previously projected rate of deployment, in only the next three years, the country’s Labour Party is warning.
The stark warning/projection comes via figures included in the government’s recent impact assessment on the most recent round of proposed changes to subsidies — announced last month as part of the UK’s new push to transform the country’s solar market from one based around large solar farms to one based around rooftop solar.
As part of the proposed changes — still subject to change — solar projects larger than 5 MW in capacity will be ineligible to receive subsidies from the Renewables Obligation (RO) support scheme. If approved, these changes will begin in early 2015.
These changes have some in the industry worried that the expected uptick in rooftop solar won’t be able to make up for the expected slowdown in the deployment of larger ground-mounted projects with slashed subsidies.
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And now Labour has pointed to figures in the government’s own impact assessment that show under the government’s central scenario, deployment of solar PV under the RO from 2016/17 will fall from 4.5 GW to 3.2 GW.
Challenged in the Commons by shadow climate minister Julie Elliott over the potential shortfall, enough to power 400,000 homes, Barker downplayed fears that the development of the industry would be restricted, claiming the solar industry is “going through an extraordinary expansion” and that further growth would be delivered so long as the sector continues to drive down costs and minimize its dependence on subsidies.
To support his point, Barker noted that all renewable energy technologies will soon “be transferring from the RO to the new Contracts for Difference (CfDs) system which guarantees electricity prices, with solar at the front of the queue to secure contracts at auction.”
“We’re not proposing cuts to solar, we’re putting solar at the forefront of the transition to CfDs,” he continued. “We’re seeing tremendous growth in solar and our solar strategy will ensure growth for years to come. This government is 110% committed to solar.”
Regardless of his seeming optimism though, many in the industry remain worried — with the fear that the complexity of CfDs means smaller developers won’t have easy access to them, potentially limiting the pace of development.
On that note: “Solar is one of the cheapest forms of large-scale renewable energy, which has seen impressive cost reductions and is reaching grid parity in many parts of the world,” Elliott stated. “The UK should and can still be a world leader in renewable energy. A Labour government would set a 2030 power sector decarbonisation target and establish an Energy Security Board to provide the certainty investors need and secure our long-term energy future.”
In related news, a new partnership between the Chinese solar PV manufacturer ZNShine and the UK-based solar installer Map Environmental was recently announced. As per the partnership, ZNShine will manage a capital-fund of £400 million provided by state banks in China, and Map Environmental will submit clean energy projects to them for consideration. If approved, Map Environmental will develop them and retain a 50% stake in the projects once completed.
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