While many in the UK solar industry will still see any changes as bad changes, the reality of DECC’s proposals will be greeted warmly behind closed doors by many installers and developers of UK solar.
In the past, DECC’s consultations have largely been rubber stamped after somewhat token consultation gestures. On this occasion, the final details are almost tantamount to a U-turn in the original intentions from DECC that appeared to suggest an intent to kill solar at any cost.
The main winners (if that is an appropriate term) are those focused on completing large scale sub-5MW projects under the RO scheme through to 31 March 2017. While there are severe restrictions on qualifying for grandfathering – most notably the cut-off date of 22 July 2015 for applications being submitted – having 12 months after 31 March 2016 at 1.2 ROCs is something few thought would be on offer. The upside of Scotland remains, and potentially makes this even more of a priority after 31 March 2016.
The exact reasons for DECC’s apparent softening in cuts, to both FiTs and ROCs, will never be known, but there are likely a wide range of factors coming into play. However, in this context, the role of the Solar Trade Association – and in particular Paul Barwell – must surely be applauded in having moved industry lobbying power to an altogether new level in the past few months. Without the highly visible efforts from Paul, the STA and others, it is likely the outcome would have been far worse than announced and could have taken the solar industry in the UK to the brink of extinction. Campaign group 10:10 were particularly active with a number of high-profile publicity stunts that wrenched the issue into the public conscious. Kudos to them.
The reality of the new FiT rates for small rooftop installers is much better than expected, but this is not hard when FiT rates for kW installs were being proposed to be cut to barely a penny. The new rates are certainly a large set-back, but definitely manageable within a more mature business model. Now the focus will be on eking out the fat through the supply side, driving down upfront capex costs to the consumer, and having a more diversified sales pitch – compared to doing a side by side financial gain comparison to ISAs – that is more aligned to the broad benefits of solar panel deployment at the domestic side.
The mid-scale and large commercial rooftop FiT discussion is still not that relevant, as this market failed to take off even when the high FiTs were in place. The drivers here are still long-term and the changes today are not going to see any great changes to deployment figures over the next few quarters.
2016 will still be a reset year for UK solar, but not a cliff-edge year. And with the news from DECC yesterday, the recovery phase to transition to a low-subsidy environment has just become less bumpy and considerably more viable than many had feared just 24 hours ago.