Solar photovoltaic is an important part of the UK’s energy mix: there is currently 2.7 GW of PV capacity in the UK – enough to power 620,000 homes – placing us firmly in the global top 10 economies for solar power. We expect this progress to continue, up to a projected deployment of between 10-12GW by 2020.
A month ago, we published our Solar Strategy. This sets out the actions that Government is taking in partnership with the industry to ensure that the solar sector continues to grow. It included a focus on deploying more solar panels on the top of industrial and public sector buildings – a part of the sector that had been deploying at lower levels than we expected.
In order to support that rooftop deployment, we are consulting today on splitting the current ‘degression band’ for projects over 50kW under the Feed In Tariffs scheme (FITs) into two: one for standalone, one for non-standalone. In other words, tariffs for building-mounted solar panels would reduce at a slower rate than for ground-mounted solar panels, so giving rooftop-mounted schemes access to more of the financial support available through FITs.
The Solar Strategy highlighted that Government was considering the implications of current deployment trends on the budget available for financial incentives to solar PV under the Renewables Obligation (RO) and would consult on any proposals for amendment.
Large-scale solar is deploying much faster than we expected. Industry projections indicate that, by 2017, there could be more solar deployed than is affordable – more than the 2.4-4GW set out in the electricity market reform (EMR) delivery plan.
We need to manage our financial support schemes effectively and responsibly. That means that we need to ensure that the growth of the solar sector is delivered in a way that gives best value for money to consumers and allows us to offer effective support to the renewables sector as a whole.
So we are also consulting today on proposals to close the RO to new solar PV capacity above 5MW from 1st April 2015, across England, Wales and Scotland. Those proposals include grace period arrangements to protect developers who have already made significant financial commitments.
We propose keeping the RO open for projects under 5MW which are not eligible for the new Contracts for Difference (CfDs). Projects above 5MW will be able to apply for CfDs – part of our world-leading Electricity Market Reform Programme that is marking further progress in its publications today.
