Cameron talks up solar’s potential under CfDs in response to industry pressure

The Prime Minister, David Cameron has stated that solar “has the potential to play a valuable part of the UK’s renewable energy mix”, in a written response to calls from more than 150 businesses to support Britain’s solar industry.

The Prime Minister rejected claims that the solar sector was being unfairly hampered by being forced to adopt the contracts for difference (CfD) mechanism early, stating that CfD support could be "more attractive" to developers.

Cameron acknowledged that solar’s rapid deployment over the last four years – from <1GW to 5GW – had demonstrated the technology’s potential to create “significant opportunity for growth in the sector and the wider economy”.

However, the Prime Minister stood behind plans to scrap renewable obligation support for >5MW solar from April 2015. Cameron claimed that action was necessary because “it is essential that we maintain strict control over the impact on consumer bills”. The Prime Minister echoed the Department of Energy and Climate Change’s claims that “large-scale solar PV, under the RO, is deploying much faster than previously expected, and we are concerned about the impact this could have on the levy control framework (LCF)".

Cameron also played down the threat to large-scale solar developers over the switch from RO to Contracts for Difference (CfD) stating that, contrary to the sector’s claims, “a number of large scale solar PV developers have publicly recognised, the inherent merits of a CfD could make it more attractive than the RO despite the allocation risk”.

Reacting to the Prime Minister’s letter, Leonie Greene, head of external affairs at the Solar Trade Association commented: “Here is what we can do to work together: make absolutely sure that Contracts for Difference will work for solar, retain but review the existing RO to ensure we don't lose the level playing field for solar, and fix the feed-in tariff for large roofs as soon as possible."

Greene added: “The solar industry has done its bit to lay the foundations for the successful future of UK solar. But we can’t start building the house if the architect keeps changing the designs. Solar can become subsidy-free next Parliament, but only if government provides a level playing field and stable policy.”

The trade association has also taken issue with the Prime Minister’s claim that the government is putting an emphasis on large-scale, roof-mounted solar arrays. The STA argues that the sector is being unnecessarily constrained by policy, especially the ill-suited feed-in tariff structure for commercial-scale solar.

The STA points out that even DECC’s own impact assessment predicts that proposed policy changes could lead to a drop in overall PV deployment by 420MW by 2020.

Cameron said that the government will publish its response to the consultation over support for large-scale solar “shortly”. The Prime Minister’s full letter can be viewed below:

David Cameron replies to the solar industry over proposed changes to large-scale solar support