Government moves to boost commercial property solar market

25th November 2014

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Jenny Hodges

Businesses installing solar panels on rooftops will still be eligible to receive subsidies if they move them to another premises under proposals announced by the government today.

There is significant potential for solar photovoltaic (PV) panels to be installed on commercial rooftops, with around 250,000 hectares of south-facing commercial rooftops, the energy and climate change department (Decc) believes. However, the rollout of solar PV on commercial buildings in the UK has been slow compared with other European countries.

Current rules state that if solar panels are moved, they become ineligible for government financial support under the feed-in-tariff (FiT) scheme. This can act as a significant deterrent to landlords and tenants who cannot guarantee to have the long-term ownership or lease of a building, the government believes, as the average commercial tenancy is only six years.

Decc is proposing that rooftop installations over 50kW will be eligible for transfer FiT payments. Moving panels under this size will be proportionally more expensive and so transferring them would not be financially viable, it said.

Installations will only quality for continued FiTs if they meet certain criteria, including that they remain the same size and are entitled to either the same or a lower FiT payment; and planning permission and acceptance into the grid have been granted before the move takes place.

The Solar Trade Association (STA) has identified the lack of transferability of FITs for solar panels on commercial buildings as a major barrier to the UK’s solar market.

STA chief executive Paul Barwell welcomed the consultation, saying that it would give businesses the confidence to invest, and could enable them to access capital at cheaper rates. “It’s about knowing you’ve got security of payments if you move,” he said.

Consultation on the proposals is open till 5 January 2015, and the government hopes to implement the changes next year.

Dess has also published its response to the consultation on a grid delay grace period for getting support from the renewables obligation. The department has decided to put in place the 12-month grace period suggested by the STA.

Barwell said: “This will allow solar farms to continue to get funding from the renewables obligation when, through no fault of their own, there has been a delay connecting to the grid.”

Richard Twinn, policy and public affairs officer at the UK Green Building Council, said: “This is step in the right direction from DECC. Removing this barrier could encourage more tenants on medium term leases of five to 10 years to install solar PV as they’ll have a greater chance of seeing a return on their investment.

“But there are still much bigger issues preventing the uptake of PV. A lack of information and concerns about the quality of installations are both far more likely to be deterring businesses from investing in this renewable technology,” he said.

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