Clean Power

Published on July 6th, 2014 | by James Ayre


Cuts To UK Solar Incentives Could Slash Future Deployment 30%, Labour Party Warns

July 6th, 2014 by  

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.

Image Credit: First Solar UK Solar

Image Credit: First 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.

Business Green provides more:

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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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • tomandersen

    You can tell how crazy and disconnected from reality ‘green’ energy has become when the UK is putting in GWs of solar. About a pound sterling per kWh, and that’s during those sunny days that they get so many of. The rest of the time its supposed to come from clear cutting the USA and polluting the air around Drax.

    • Ronald Brakels

      Tom, rooftop solar, which competes with retail prices, produces electricity for roughly 10 Australian cents a kilowatt-hour here. So are you trying too claim that Australian cities receive an average of about 18 times as much light from the sun as UK cities do, since a pound is about $1.80 at the moment, or are you claiming that solar costs about 18 times as much in the UK as it does in Australia? Pick one. Or you could pick the third option which is where you admit you were too lazy to perform even the most basic research on this topic.

  • spec9

    Cameron is a douche.

  • dango-man

    The actually worry for the solar industry is that the government is not making the changes for the rooftop market quick enough too make up for the difference in the drop in the ground mounted installations.

    Also another worry of the move to CfD is the budget allocated to solar will not be large enough as that will decide the number of installations and not necessarily the change to CfD itself that will affect the number of installations. The change was expected by industry although not as quickly since it moved from 2017 from 2015, however in 2015 and 2016 solar will not have to compete against other renewables for the CfD which is the upside as the other renewables such as wind will not switch to CfD until 2017.

    Overall the impact of the change will be limited as long as the government speeds up the changes to rooftops and allocates enough of a budget to accommodate solar.

    • JamesWimberley

      What is the problem in the UK with commercial solar (on the roofs or car parks of factories, warehouses, shops, offices, schools, and hospitals)? It hasn’t really taken off, unlike residential rooftop and utility. Is it the complexity of design, planning obstacles, misjudged incentives, or ingrained business conservatism? I believe Australia has a similar problem, contrasting with Germany and the USA.

      • dango-man

        There are a few problems such as the size of solar installations that can installed on roofs without having to apply for planning permission. Currently ‘Permitted development rights’ which allow property owners to make minor modifications to their property without planning permission are restricted to installations of < 50kW but the government is looking to increase this to 1MW also applying for the feed-in-tariff above 50kW is a lengthier process compared to smaller installations.

        Secondly is many commercial buildings are rented and there are barriers between the landlord and tenant such as who should bear the costs of installation and receive the FiT particularly if the tenant pays for the part of the installation and then moves. The incentives for the commercial area are good but not brilliant as the rate is reduced since they are larger installations but these are unlikely to change as the government is likely going to wait for the solar costs to reduce.

        Complexity of design and ingrained business conservatism are not issues in the UK. Many commercial buildings can accommodate solar panels and many businesses recognize as solar as a way to reduce costs however as much mentioned above the lengthy process can be off-putting and the lack of capital particularly affects smaller businesses.

        The UK government is working to change these thought they are doing quite slowly. Some good news is for school and hospitals which the government own is they are making it easier for them to install and are helping them to get money for the installations by allowing them to get money by donations, using peer-peer lending or finance options through solar companies.

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