Automatic reductions to support for solar PV were published by Ofgem. The Feed - in Tariff (FIT) scheme automatically lowers support by 3.5% after three quarters (nine months) even if little solar capacity has been installed.
The new Tariffs will come into effect in May. However, the domestic (and small commercial) sector up to 50kW will not be affected.
The STA is particularly concerned about the 250kW - 5MW FIT band, where very few installations have taken place. Ofgem data shows just 9MW of schemes for large commercial/industrial sites have been built since August last year, and just 6MW of community - scale solar. Support of 7.1p/kWh has proved too low to kick - start the market, yet it will reduce in May to just 6.85p/kWh, putting this important sub - sector of solar further out of reach.
The 50kW - 250kW band, which should also be a major growth sector for the market, is seeing only modest deployment and also needs to take - off. Medium and large - scale solar roofs up to about 1.5MW in size are a major feature of solar markets overseas. They present excellent value for money, being cheaper than other renewable power technologies supported by Government. However, non - domestic roof - mounted solar is being suppressed in the UK, firstly because the tariff was set at an uneconomic rate under the new FIT control mechanism last August, and secondly because the expansion of non - domestic solar is constrained by overly tight capacity allowances. With even a modest increase the medium and large - scale roof sector would take off, but still be cheaper than other renewables support. The STA has already written to Energy Minister Greg Barker urging him to unlock the potential of the large - scale roof sector under FITs. STA Head of External Affairs Leonie Greene said:
“Larger solar roofs are very cost effective and have a major role to play transforming choice for businesses, communities and public sector actors in the electricity sector. If we are serious about Electricity Market Reform and value for money in the UK, then the tremendous potential of big solar roofs needs to be unlocked.”
DECC Ministers are currently considering increasing the maximum capacity for FIT under the Energy Bill. However, the STA is concerned that it is failure in the existing FIT bands that requires more urgent attention. DECC had previously sought to address this through a separate band in the RO for roof - mounted systems.
STA CEO Paul Barwell said:
“It makes little sense to be looking at increasing the maximum size for FIT - eligible solar projects when it is clear that it is the existing large - scale roof sector that urgently requires attention. While DECC have sought to recognise the large - roof sub sector under the RO, the FIT is the best mechanism for actors in the commercial, public and community sectors, who need a user - friendly support scheme. We're in danger of developing an illogical and messy policy framework if we don't deal with the obvious failures under the existing scheme.
“I urge Ofgem and DECC not to degress these FIT bands in May. We will be writing to Ministers again to explain the importance of these sub - sectors. Furthermore non - domestic solar should not be subject to tight capacity constraints given how cost effective it is now. Constraining its growth, while supporting more expensive technologies, is unfair.”
