STA responds to reports of possible policy changes for solar power

The STA is seeking to get clarity for members from officials.

BusinessGreen quotes Government sources confirming that DECC will launch an "imminent" review of solar support schemes [1]. If this includes the Renewables Obligation (RO) this will be the third RO Review for solar power in less than three years.

The STA has been concerned about this prospect for some time and is expecting a meeting with the Secretary of State Ed Davey shortly to discuss this. The STA is seeking to get clarity for members from officials. Hundreds of millions of pounds is currently invested in projects not due to be built until next year and the STA is very concerned to safeguard investment as well as the health of the UK industry.

Energy Minister Michael Fallon told the House of Commons recently: "There is no further comprehensive banding review planned for the Renewables Obligation (RO) scheme before it closes to new generation on 31st March 2017." [2]

Support levels for ground-mounted solar already dropped 70% in the first two years of the Feed-in Tariff. RO support levels for ground-mounted solar were equal to offshore wind two years ago (2 ROCs), but have dropped a further 30% since then (1.4 ROCs today).

STA CEO Paul Barwell said:

"We are disappointed to read that DECC is launching another review on the solar industry. Investor confidence and market stability is absolutely essential in order to deliver sustained cost reductions for consumers and a healthy solar industry for UK plc. We are obviously on tenterhooks to see what changes DECC is proposing to make.

"We have been concerned that DECC's Solar Strategy seeks to shift solar to mid-scale rooftops when the UK policy framework is inadequate for these scales. We have been pressing for reforms to the user-friendly Feed-in Tariffs for nearly a year to address this, something that must now happen urgently. We hope DECC will announce a major increase in the amount of mid/large solar roofs that can be delivered under FITs. Any changes to the RO for roof-mounted solar would undermine this objective because it is delivering very little rooftop deployment.

"We are also concerned that any excessively hasty push for cheap solar will come at the cost of achieving quality in the solar farm industry, which is essential to retain public support. We launched a biodiversity best practice guide with the National Trust, RSPB and other conservation groups just yesterday. Government should be supporting best practice. We hope DECC's proposals will be aimed at supporting industry efforts to deliver quality solar farms." [3]

The difficulties for solar farms are compounded by the proposed replacement of the RO with Contracts-for-Difference under Electricity Market Reform. The proposals are highly complex and will greatly increase risks for smaller SME companies, which dominate in solar, compared to big utilities.

The recent growth in large scale solar power has not dented solar's position as the UK's most popular energy source. In fact, research published just today by DECC finds that public support for solar power is the highest it has ever been (85%) – as is the proportion of people who "would be happy to have a large scale renewable energy development in my area" (59%) [4].

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