The UK solar industry could be accused of being deeply cynical towards the Department of Energy and Climate Change and with good reason. Numerous mishandlings of the feed-in tariff scheme have led to various boom and bust scenarios over the last couple of years but, more importantly, deep cuts have left people without jobs.
The industry’s cynicism is particularly notable around reference dates and consultations.
DECC’s last (“legally flawed”) consultation closed after the proposed changes came into effect, a fact that left a pretty bad taste in the industry’s mouth. So much so, that many have become deluded with the whole consultation process to such an extent that they won’t submit a response. What’s the point when Government has already decided what it’s going to do anyway?
Well, the noises coming out of DECC are remarkably different from this time last year. Like it or not, the succession of fast-track reviews got DECC’s attention. Not only was solar PV outstripping demand for other renewables, accounting for 98.7 percent of all FiT capacity (and demonstrating a clear public appetite for the tech) but the cost of the technology had fallen dramatically over a period of just months.
Solar PV’s current and projected cost reductions are what really spiked DECC’s interest. The Department needs to hit the nation’s emission targets in a cost-effective manner, solar PV has directly demonstrated to DECC that, with support, it has the potential to deliver significant renewable capacity on the cheap. This is what has caused the change in tune from the Department - suddenly we have an ambition of 22GW (however, the Department is keen to stress that 22GW is an ambition not a target).
If we’re to realise Barker’s ambition of 22GW by 2020, the industry needs to work together with DECC. The changes being put into place at the moment will affect solar in the UK, not just in the near future, but also solar’s longer-term transition to grid parity.
There are aspects in both consultation documents 2A and 2B that strongly affect solar PV. It is vital that members of the industry take the time out of their day to submit a thorough and reasoned response to the Department. To those who still maintain that DECC will ignore responses and carry on regardless, take a look at the energy efficiency level requirement being downgraded to level D from C. DECC listened to significant response from the industry and acted accordingly.
Issues raised in consultations 2A and 2B
Below is a very small selection of key issues raised in both consultation documents that DECC is seeking opinions on.
Speaking at the Solar Power UK roadshow: Coping with the Cuts, Dr Alex Weir, Senior Policy Advisor for DECC reiterated that, “this is a genuine consultation.” He stressed that: “It’s in everyone’s interest to get the costs and FiT rates right.” DECC’s cost projections used to model the proposed PV FiT rates in consultation 2A are based on a report carried out over three days that took data points from just 13 companies. In order to improve the Department’s cost modelling, industry must provide DECC with accurate cost data. Inverter and mounting costs should not be forgotten either as there is a tendency to fixate solely on module costs.
Under current proposals the FiT rate going forward will be dependant on the deployment rate in March and April. Industry should urge DECC not to use March/April figures because the looming cut to the FiT rate will cause another ‘gold rush’, the result of which will be artificially high installation numbers dictating an overly restrictive FiT rate.
DECC is currently only allowing for 500MW of solar capacity to be installed in 2012, by all accounts this figure is too low and will significantly constrict the market over the year.
DECC is seeking opinions on whether the tariff lifetime for solar PV should be reduced to 20 years to be brought back in line with the other technologies in the feed-in tariff scheme. Can you provide DECC with evidence that 25 years is a justifiable lifetime period for solar photovoltaic technology?
DECC is consulting on what level the export tariff should be set at. The Department has already admitted that 3p/kWh does not accurately reflect the true value of the exported electricity. As a result, the export tariff is likely to be raised but to what level? Provide DECC with evidence of the true value of exported solar electricity.
As stated before, the above is only a small selection of pertinent issues raised in the consultation document. Please take time out to read through DECC’s proposals and submit a response, it might make more of a difference than you think. Responses to consultation 2A must be submitted before April 3 and responses for consultation 2B must be submitted before April 23.