Bright new dawn for UK solar


Despite the British government’s controversial backing of the country’s fledgling fracking industry, it is the U.K.’s solar power sector that is piquing the public’s interest and support. As shale gas sites draw protests and public scorn, new figures released in January by the Department of Energy and Climate Change (DECC) revealed that half a million buildings in the U.K. now have solar panels fitted. As of January 5, some 499,687 solar arrays had been installed across the country, driven by a feed-in tariff (FIT) specifically designed for solar arrays with a capacity of less than 50 kW.
The DECC estimate that as many as 1,900 new solar installations are fitted each week on average throughout the U.K., with public support for solar also evident in the success of Solarmass – a British company that recently managed to raise $190,000 in just ten days via crowdfunding platform, Crowdcube.
Indeed, such is the interest for solar in the U.K. that Lightsource Renewable Energy – the country’s leading generator of solar power – in January embarked on a “Solar Roadshow” designed to educate many of the country’s farmers, businesses and residents on the power of PV.
Climate change minister for the coalition government, Greg Barker is confident that the U.K.’s bottom-up approach to solar power will help the country hit a 4 GW installed capacity milestone in the coming months, calling current growth a “staggering achievement” in a speech at Parliament last month that will have been music to the ears of Britain’s solar PV industry.
“Having half a million rooftop PV arrays installed is an exciting milestone for U.K. solar power – with costs falling fast, it’s little wonder so many people have invested in solar panels for their homes,” Friends of the Earth Energy Campaigner Guy Shrubsole told pv magazine . “But it’s a drop in the ocean compared to Germany, where thousands of larger solar installations already exist on apartments, hospitals and schools. The Government must make it easier to set up such projects in the U.K. Enabling whole communities to generate their own clean power will help tackle climate change and protect bill payers from price hikes.”

A solar community

In late January, the U.K. government announced such a plan, drafting up a set of guidelines designed to urge large-scale solar and wind farm developers to offer a “meaningful share” of their projects to local communities.
“For too long, community energy has been a policy footnote, with all the focus on big generators and individual households – all but ignoring the potential of communities to play a key role,” said a DECC statement by Secretary of State for Energy and Climate Change, Ed Davey.
Reluctant to impose a specific sharing figure, the government has instead suggested that the “meaningful share” should contain measures designed to stimulate more community control for renewable energy sources. Early estimates from the government predict that community-owned projects could generate enough clean energy to power one million homes by 2020, with 51% of householders polled by the government stating that they would invest in these projects if it meant that their energy bills would be lowered. The FIT threshold for such community-backed PV initiatives may also be doubled from 5 MW to 10 MW in an effort to make rooftop arrays on community buildings more financially viable. A decision on this is expected in Spring.
The proposals were welcomed by a number of the U.K.’s leading energy organizations. Renewable Energy Association (REA) Chief Executive Nina Skorupska said: “We are delighted that the government is really serious about helping ordinary people become active participants in the energy economy. People are beginning to rethink energy, seeing that it doesn’t have to be expensive and polluting, and that they can even supply clean energy themselves. This is why we are seeing such excellent growth in the number of community energy companies.” The REA has been invited by the government to work with the Solar Trade Association (STA) and other energy associations in order to nurture the community energy sector and help generate a level of ambition for partly or wholly-owned community power generation. The STA’s head of external affairs, Leonie Greene, said: “No technology democratizes ownership of the power sector better than solar. The U.K.’s solar power output is already owned by half a million solar households and by new independent companies outside the ‘Big Six’ utilities, as well as a few thousand businesses and communities.
“It is clear that solar is delivering a revolution in ownership, as well as in clean power generation. The further scope for community ownership of solar across the U.K. is tremendous. However, in practical terms, fulfilling this exciting vision does require government to ensure the feed-in tariff can support the take-off of community-scale schemes.”

Public PV push

Should the British public back this program, the government is confident that by 2015, “it will be the norm for communities to be offered the opportunity of some level of ownership of new, commercially developed onshore renewables projects.” For PV specifically, the U.K.’s solar industry has set a target of installing one million solar arrays on homes by 2015. At the beginning of 2014, with that The 5 MW Westmill solar farm in Oxfordshire, England, is the world’s largest community-owned PV plant.figure currently standing at half a million, such an ambitious final target may appear tantalizingly out of reach. But industry experts are now more bullish, suggesting that the U.K.’s solar industry is enjoying a not-so-quiet revolution. The 2015 target, according to Greene, looks “very achievable.” As reported in the Guardian, Greene revealed that public opinion polls show overwhelming support for solar power in the U.K., with an increasing number of householders more than happy to “put their hands in their pockets” to support the sector.
“Politicians may be fighting about energy and climate change in Westminster, but the public are just getting on with it,” Greene said, adding that critics’ attempts to attack the U.K.’s FIT scheme – decrying it as an expensive drain on non-solar customers’ energy bills – were wildly misplaced.
“Everyone who invests in solar is helping to bring down costs for everyone else in future. Thanks to public investment, subsidies have dropped 65% in three years, and costs continue to fall. If we carry on investing, solar will soon be able to compete with ‘Big Six’ energy bills without subsidy. The FIT cost around seven pounds (€10; $12) on household bills last year, so for all the hysteria about renewables costs, this is proving to be a very affordable energy revolution indeed,” Greene told the Guardian.
Figures from the DECC show that FIT-driven solar installations (those with a capacity smaller than 50 kW) currently provide more than 1.8 GW of PV capacity to the U.K. grid. Comparatively, solar analysts NPD Solarbuzz reported recently that the U.K. added 1.45 GW of large-scale utility solar power in 2013, making it the fastest-growing utility-scale solar market in Europe, and setting the country on course to achieve a cumulative capacity of 4 GW by the end of March.

On the road again

Hoping to tap into the U.K.’s increasingly dynamic solar power industry is solar energy generation company Lightsource Renewable Energy. In January the company embarked on a week-long solar roadshow, which aimed to increase awareness and understanding of solar technology across many of the more rural parts of the country, inviting farmers and businesses to attend their free solar workshops.
“Solar power is one of the U.K.’s fastest-growing industries,” said Lightsource Renewable Energy CEO Nick Boyle. “Our goal is to have as many people involved in this positive, low carbon sector as possible. Whether it’s benefiting from land rent, fixed price electricity or working to build the farms, there are opportunities to be part of this exciting change in the U.K.’s economy.
“We are focused on championing the rural economy and

Key Points

  • With half a million rooftop PV arrays now installed, the U.K.’s solar sector is on course to reach 4 GW of installed PV within the next few months.
  • Future growth has been boosted by the introduction of the government’s Community Energy Strategy.
  • In addition to government support, public and commercial interest in solar is soaring, with 1.45 GW utility-scale PV installed last year.
  • An imminent Renewables Obligation Certificate (ROC) rate reduction rush has created a surging start to the year, but experts doubt this level of investment can be sustained into Q2.

ensuring our schemes both promote the local supply chain and benefit local communities.” Lightsource already owns and operates 80 solar farms in the U.K., delivering clean solar electricity to an estimated 100,000 British homes. It is looking to double its PV capacity by the end of 2014, and has also embarked on a recruitment drive to add an extra 100 jobs throughout the year.
These expansion plans follow the recent acquisition of a 5 MW solar farm from China Sunergy. The farm is located in Cornwall, southwest England, and generates solar energy for 1,500 local households. Commenting on the deal, Boyle said, “We believe this project will boost the local rural economy as well as allow further biodiversity.”

ROC rush

Lightsource Renewable Energy’s commitment to ground-mounted solar installations is matched by a number of companies operating right across the U.K., with NPD Solarbuzz estimating that the country’s large-scale solar PV pipeline currently amounts to 5 GW, and is expected to exceed 6 GW before the year is out.
A looming Renewables Obligation Certification (ROC) deadline has meant that the U.K.’s first quarter in 2014 is likely to see impressive growth in large-scale ground-mounted installations as companies push to connect their projects before the end of March. Indeed, for the third quarter of 2013, DECC figures show that PV capacity commissioned and accredited under the ROC stood at 228 MW, which was an 8% increase on Q2. Expect even steeper increases for Q4 and Q1 2014 as PV installers rush to complete on time.
After March 31st, the ROC rate – which currently stands at 1.6 for the fiscal year – will fall to 1.4 ROC/MWh for 2014/15, reducing by an additional 0.1 ROC/MWh each year until April 2017, at which time the contracts for difference (CfD) scheme will take over. However, for rooftop installations that exceed 50 kW, the ROC will fall from the current level of 1.7 ROC to 1.6 after March 31, falling incrementally by 0.1 MWh each year.
In preparation for these changes, the PV landscape in the U.K. has undergone a series of slight but noticeable changes. For global solar cell manufacturer JA Solar, such a transition has made the U.K. a strong market for them.
“The ROC regime, with no limit to the size of power plants, has meant very large single orders,” said JA Solar’s U.K. country manager, Alastair Mounsey. “Our average contract in Europe has a site size of around the 8 MW mark, but there are sites being built in the U.K. at 20 – 30 MW and above. The U.K. has and will become one of our most important EU markets due mainly to this large ticket value of each large-scale site. The market is also diversified and strong in residential, where ever-rising electricity costs spur the free solar and residential markets.” Mounsey told pv magazine how he believes the ROC’s relatively stable annual regression rate offers U.K. solar investors a reasonable level of security for larger-scale cash injections, particularly when viewed alongside the country’s FIT cuts. “With low interest rates across the U.K. and unpredictable real estate, PV investment – backed by the government – has generated a lot of interest, attracting new entrants and spurring innovative funding activity,” said Mounsey.
An accepted appeal of the U.K. market is the widespread maturity and success of many of the country’s major developers and EPC companies, allied to a diversified investment sector that is willing to back heavily those markets that generate a buzz. Solar is most certainly one of those markets, especially with the U.K. government’s assertion that there will be no new ROC applications after 2017 – a ruling that is likely to create a higher demand for the ROCs until then, attracting heightened interest from pension and other funds prepared to “sit on the ROCs for longer,” according to Mounsey.
“Even when a PPA is to be paid out on export, the investment return is viable at 1.4 ROC and even 1.2, and all the major players have strong pipelines for 2014 and beyond,” he added. Any subsidy cut deadline will create a rush, however particularly those that are governed by a regression-based subsidy, such as ROC. With the end of March looming, the timing has been criticized, fuelling an installation rush during the wettest, coldest months, exacerbated by the Chinese New Year at the end of January – a period when Chinese factories grind to a halt.Beyond these immediate pressures, the U.K.’s solar industry faces further hurdles, not least with grid connectivity issues that are expected to create difficulties as more and more community-linked PV projects seek access.
However, much like heightened concerns over FIT thresholds, ROC rates and community share, the fevered dialogue surrounding solar in the U.K. reflects the esteem in which the industry is now held – and marks a welcome departure from antipathy and fear. How the U.K.’s shale gas sector must wish for such “problems.”

Share in the community

The DECC’s Community Energy Strategy aims to broaden the level of government support available for community energy projects. According to Energy and Climate Change Secretary Ed Davey, the scheme includes: a GBP 10 million (€12.1 million; $16.5 million) Urban Community Energy Fund to kick-start community energy generation projects in England; a GBP 1 million (€1.2 million; $1.7 million) Big Energy Saving Network funding to support the work of volunteers helping vulnerable consumers to reduce their energy use; a community energy saving competition, offering GBP 100,000 (€121,000; $165,000) to communities to develop innovative approaches to saving energy and money; and a “one stop shop” information resource for people interested in developing community energy projects.


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