UK solar sector buoyed by $17bn of investment since 2010

A report released this week by the U.K. Department of Energy and Climate Change (DECC) has revealed the true extent of solar PV investment in the country over the past five years.

Since 2010, the report finds, more than £11.4 Billion ($16.9 billion) has been invested in the sector, driving nationwide installment levels from a mere 33 MW in February 2010 to more than 5 GW today.

The report, titled Delivering UK Energy Investment: Low Carbon Energy, paints the solar industry as an ongoing success story, despite recent attempts by the government to slow its growth. However, DECC adds that 99% of the current solar PV capacity installed in the U.K. was deployed under the current coalition government, which – although a rather serendipitous correlation – does suggest that the incumbent parliament has at least been sympathetic to solar PV.

As it stands, there are more than 650,000 individual solar PV installations in the U.K., with around 900 MW currently under construction, a further 3.2 GW awaiting construction and 1.4 GW of project applications submitted. The sector employs more than 34,400 people.

By 2020, the report adds, it expects solar’s deployment range to be around 12-14 GW as part of the U.K. Electricity Market Reform (EMR) Delivery Plan. The forthcoming April 1 deadline will see the removal of the Renewable Obligation (RO) scheme for large-scale (> 5 MW) solar plants, but DECC’s report confidently states that it believes that smaller-scale solar installations will play a "vital part of the U.K.’s energy mix".

The report continues: "Deployment of solar PV remains one of our priority renewable energy technologies and, consequently, deployment has been rapid over the last four years, in part driven by a large drop in technology costs globally." DECC forecasts that levelized costs of electricity (LCOE) for large-scale solar PV in the U.K. will fall by around 28% between now and 2020.

Commercial-scale support

The DECC report adds that the government is keen to lead by example in the continuation of support for commercial- and smaller-scale solar PV deployment, revealing that the Cabinet Office is undertaking a program to promote the installation of solar panels across the government’s estate. Early projections anticipate that this program could amount to at least 500 MW of rooftop solar in the first instance.

For small and medium-size business enterprises, the government has this week also made it easier to install a solar PV array atop commercial-scale rooftops, with Secretary of State for Communities and Local Government Eric Pickles finally approving a proposal submitted last summer to increase the permitted development threshold for rooftop solar panels from 50 kW to 1 MW.

This new ruling now means that businesses do not have to secure planning permission for PV rooftops up to 1 MW in size.

"We are delighted with this announcement, which will make it much easier for factories, farms, hospitals, bus stations and other commercial buildings to generate their own sustainable electricity while also saving themselves money and resources," said Nina Skorupska, chief executive of the Renewable Energy Association (REA).

"Solar installed on commercial buildings has the potential to generate significant amounts of clean electricity, yet it is a considerably underdeveloped area, and the rigidity of the planning system has long been a major barrier to its progress."

Skorupska added that increasing the threshold is a simple but effective step towards lifting the shackles of this particular sector of the U.K. market, and will serve to help developers avoid uncertainty in terms of degression of feed-in tariff (FIT) rates.

Conor McGuigan, Business Development Director at Lightsource, told pv magazine: "Certainly this is a positive move for rooftop solar, although what we still don’t know is when this will come into effect and what the actual provisions will be. There is a huge potential for commercial rooftop installations in the UK and this a definite step in the right direction."

David Pickup, business analyst at the Solar Trade Association (STA), said that the decision to increase the planning permission threshold removes another barrier to the sector.

"Extending the threshold from 50kW to 1MW is a boost for commercial solar," he said. "So many warehouses, factories and offices could save money on their energy bills by having solar PV on their roofs. However, there isn’t enough room for this market to grow before the Feed-in Tariffs drops to zero, killing the market completely. Our upcoming Solar Independence Plan will show a way to allow more growth in this crucial sector.”

Solar PV Strategy

DECC’s report also outlined how the recently introduced Solar PV Strategy can continues to serve the U.K.’s solar sector over the coming years. Its aim, the report says, is centered around three markets: small-scale building-mounted PV panels (such as residential housing and small commercial premises); PV panels mounted on commercial and industrial buildings, as well as larger public and community buildings, and large-scale industrial ground-mount solar farms, as long as they are "well sited and sensitively developed, preferably on previously used land".

The strategy has initiated tweaks to the FIT to ensure that deployment in the ground-mount sector does not trigger FIT degression in the rooftop sector – an incentive DECC believes can help spur greater investment in building-mounted PV.

The government is still consulting on whether to allow the transfer of a FIT between buildings should a system owner move premises. If approved as expected, this approach would enable greater flexibility and assurances for small and medium-size businesses considering a solar PV installation.

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