Tying UK utility-scale solar support to domestic FITs "makes no sense"20. November 2012 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends | By: Max Hall
A U.K. solar trade body has renewed its calls for the government to rein in its planned reductions in support for photovoltaics. A decision is expected on the latest renewables obligation banding within days.
With a decision on the level of solar support in the U.K. expected "soon", according to a spokesman from the government’s Department for Energy and Climate Change (DECC), the Solar Trade Association (STA) is concerned about plans to reduce support for medium (50 kW to 5 MW) and large-scale (5 MW+) installations through the Renewable Obligation Certificates (ROC) mechanism, in line with the rate of regression for small-scale solar FITs, and believes it is disingenuous to compare the costs of utility-scale projects with household installations.
In a response to DECC’s consultation paper on the Renewable Obligation Banding Review, the STA said, "Once again the rug has been pulled from under the non-domestic solar market, despite remarkable achievements. This instability happens at a time when the FiT market is very weak.
"We disagree with both the figure of 1.5 ROCs and the methodology for arriving at this figure. We do not believe 1.5 ROCs to be based on sufficient evidence, indeed we understand from DECC officials that it was based on just two data points."
Under the ROC system, energy suppliers can fulfill their renewable energy obligations by presenting ROCs, with any shortfall prompting a payment into a central fund, which is then given back to energy providers according to the number of ROCs they presented.
Photovoltaic plants of 5 MW or more can currently generate 2 ROCs for each MWh generated, with mid-sized plants having the option of entering the ROC mechanism or using FITs – reduced to just 7.1 pence by the U.K.’s coalition government in July 2012.
DECC initially proposed removing the ROC option from installations below the 5 MW mark, thereby limiting them to the capacity-triggered FIT program and reducing the large-scale ROC allowance to 1.5/MWh, falling to 0.9 in the 2016-17 financial year.
The controversial proposal to remove mid-size plants from ROC eligibility has been removed, but the faster rate of regression – in line with the FIT level – remains, to the dismay of the STA.
The lobby group points out that large-scale installations have large staff costs and other overheads which homeowners fixing panels on their roof do not have to consider. These larger-scale investments are inherently more risky and deserve higher rewards accordingly, says the STA.
"To tie RO support to FiT bands therefore makes no sense," added the STA response to the banding consultation. "It would result in solar being greatly constrained even when it is much more cost-effective than other RO technologies. This is not the way to set RO band levels for solar."
The DECC was unable to supply a response to pv magazine’s questions at the time of going to press.
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