Decc shares plan to boost commercial scale PV

15th May 2014

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Blair Birrell

Companies looking to install solar panels could benefit from higher subsidies if new proposals to amend feed-in tariffs are given the green light

In a bid to encourage more organisations to invest in the technology, the energy department is proposing to amend the feed-in tariff (FIT) scheme to introduce a new tariff for solar photovoltaic panels (PV) mounted on "mid-scale" buildings.

In its “solar strategy” document published last month, the government acknowledged that, while deployment of domestic-scale PV and large farm-scale solar projects was booming, commercial- and community-scale projects had not been installed at the rates it expected.

Decc is now consulting on splitting the FIT for solar PV projects over 50kW into “standalone” (ground-mounted arrays) and “other than standalone” (building-mounted arrays). Under the proposals, the tariff for roof-top arrays would be reduced at a slower rate than that for ground-mounted projects.

The plans would also see the digression triggers – the amount of new PV capacity that can be installed before the FIT is decreased – split 70/30 in favour of “other than standalone” projects, enabling more building-mounted arrays to be installed.

Decc’s plans, which could come into force as early as 1 October this year, have been criticised by the UK’s Solar Trade Association (STA) as failing to address the barriers to commercial-scale solar.

“The STA is bitterly disappointed that Decc is not proposing to increase the capacity triggers for FITs,” states the group’s response to the energy department’s plans. “Despite the solar strategy claiming it wanted to see a major increase in roof-mounted solar, Decc is not proposing to correct the major structural problems with FITs essential to deliver this goal.”

Decc has also come under fire for its plans to change support levels for large-scale solar projects – those with a capacity of more than 5MW. In a second consultation, the energy department is proposing to halt support under the Renewables Obligation (RO) for large scale PV from 1 April 2015.

Under the current arrangement, which is due to run until 2017, solar farms can claim 1.4 RO certificates (ROCs) per MW of electricity generated and large building-mounted arrays can claim 1.6 ROCs.

Decc claims that projects with a capacity of more than 5MW will be able to gain adequate support by applying for "contracts for difference" (CfDs) which are due to launch in October. It also states that it will allow a one-year grace period for any projects where developers had made “significant financial commitments” before 13 May 2014. However, the proposals were lambasted by the Renewable Energy Association (REA), which claims the plans will create “devastating instability” for the solar sector.

“Clear, stable policy attracts investment, creates jobs and drives growth and cost reductions in renewable energy technologies. However, there is not much clarity or stability on show here,” commented REA chief executive Nina Skorupska.

The energy department has also outlined plans to split its budget for CfDs into two. This will see more estabilished renewable technologies, including onshore wind and large-scale solar, compete for CfDs at auction, while less established technologies, such as offshore wind, tidal and wave and anaerobic digestion, will benefit from a ring-fenced budget.

Although it is supportive of the proposals to help developing renewable technologies, the REA is unconvinced of the overall approach.

“The piecemeal approach to the CfD scheme leaves a lot of questions unanswered, and the lack of capacity ring-fencing for most technologies compounds that uncertainty. Without knowing what Decc intends to do in terms of setting out the budget, making sense of CfD proposals is like trying to complete a jigsaw puzzle without seeing the picture on the lid.

“Th government must ensure that policy drives and rewards technology cost reductions with a stable trajectory of gradually declining financial support, not the cliff edge it is proposing for solar.”

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