Cumulative solar demand from the UK has now exceeded 2GW, with demand during 2012 surpassing the record levels seen during 2011, according to NPD Solarbuzz. Stimulated by an attractive policy environment, declining solar PV system prices and a low-risk investment climate, solar demand for 2012 exceeded all expectations by reaching 965MW.
"The UK has now been a top 10 country for solar demand during both 2011 and 2012," stated Finlay Colville, vice-president at NPD Solarbuzz. "With demand trending at the GW-level and cumulative solar installations passing the 2GW mark, the UK can now officially be prioritized as a GW-size market by the global solar supply-chain."
Following a period of uncertainty for the UK solar industry at the end of 2011, demand is now benefiting from predictable feed-in-tariffs (FITs) and Renewable Obligation Certificate (ROC) levels. This has resulted in strong solar demand from both residential and ground-mount segments, with dedicated project financing and downstream supply channels now driving growth in each segment.
According to Colville, "other European countries have struggled to provide sustainable long-term growth for solar suppliers and overall Europe solar demand is forecast to decline from a global share of 55% in 2012 to 34% by 2015. Moreover, the UK has been able to focus exclusively on managing installation levels, without being hampered by manufacturing setbacks that have dented the solar industries in Germany, France, Spain and Italy."
Weekly installations under the FIT scheme have been approaching 5-6MW already during 2013, but will need to increase to the 20MW level if 20GW is to be reached. However, with continued declines in solar PV system pricing across both residential and large-scale projects, attractive internal rate of returns (IRRs) at the 10% level are expected under FITs out to 2015, and ROCs out to 2017.
"Support from the UK government for solar has improved considerably within the past 12 months and solar is now officially included in the UK's long-term renewables mix," added Colville. "However, there is currently scope for only 10GW of extra capacity to be fed into the UK grid. Meeting the 20GW target for solar will require additional investments to upgrade the aging UK infrastructure. However, with rises in domestic energy prices being increasingly scrutinized, public support for decentralized solar generation is likely to gain strong traction."
