British energy minister Matthew Hancock has attracted criticism from the U.K.s solar industry for suggesting that British small and medium enterprises (SMEs) should use the feed-in tariff (FIT) rather than the controversial Contracts for Difference (CfD) scheme when funding their renewable energy projects.
Speaking at the Energy and Climate Change Committee yesterday, Hancock said: "As far as small businesses are concerned, we have FITs, especially on the renewable side. FITs are precisely there to have a much lower cost of entry; CfDs are designed for the big stuff and thats expensive and we have a simpler, much more cheaper to apply for subsidy system for the little stuff."
Hancocks grouping of SMEs with small residential installers angered U.K. solar watchdog the Solar Trade Association (STA), which has argued that in order to meet the typical pre-qualifying criteria for a CfD bid, a SME would need to have a spare £200,000 ($304,000) a risk that many companies cannot afford to take. The STA believes that the CfD has been created to purposefully exclude many of the U.K.s smaller companies, despite government rhetoric suggesting it will support the growth of commercial-scale rooftop solar.
"CfDs and FITs are very different mechanisms," said STA CEO Paul Barwell. "CfDs are only eligible for projects greater than 5 MW, FITs are designed for systems below 5 MW, so minister Matt Hancock should be actively promoting both schemes."
Hancock added that, as small business minister too, it was in his interests to support SMEs, but remarked: "The practicalities of signing up bill payers to these long-term contracts means that you have to be pretty sure that the other side will see it through," alluding to a lack of confidence in the longevity of many SMEs in the U.K.
Barwell, however, retorted: "If the message here is that SMEs have to move to smaller schemes under FITs because CfDs are not designed for SMEs then that is obtuse.
"SMEs have used the [Renewable Obligation Certificate] ROC for all sizes of large-scale deployment helping to provide much-needed competition in the electricity generation market."
The ROC rug, Barwell added, was pulled by DECC in May 2014, and the STA chief suggested the governments "needs to fix" CfDs to enable and encourage competition in the market.
"Further," concluded Barwell, "if everyone moves to smaller installs under FITs, then the tariffs will hyper-degress very quickly. Our modeling shows that with only modest growth the FIT standalone tariff could be too low, too quickly, and will restrict deployment."
Popular content
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
Share
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.