Domestic solar market continues to struggle despite 40% rebound

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    Solar installations under the new tri-monthly degression model are continuing to struggle.

The latest weekly solar installation figures show that the domestic-scale solar market is continuing to struggle. Installations in September and October averaged around 1,767 a week, however, when a number of feed-in tariff levels were degressed by 3.5% at the beginning of November, the installation rate plummeted by 72.9% to just 841 registered installs for the week ending 11 November.

The steep drop in installation rates will not come as a surprise to many in the industry, as installation rates have always experienced a dramatic tail off following the downward revision of tariffs. However, the severity of the drop has caught many industry players by surprise considering that the headline 0-4kWp FiT figure was only cut by just over half a pence.

This week’s provisional figures for the week ending 18 November show that the installation rate has rebounded by 40% to stand at 1,180 installs. The 0-50kW category continues to be dominated by the lowest capacity band, with 96.9% of installations registered between 0-4kWp.

Commenting on the latest figures, Ray Noble, solar specialist for the Solar Trade Association (STA) told Solar Power Portal that the fall off in demand following the FiT was not a shock as “most installers squeeze in potential orders before the deadline to take advantage of the slightly higher FiT rate.”

As for future installation rates, Noble predicted that industry will continue to see slow growth, stating: “I think we will continue to see installation rates creep upwards but they won’t do much until after Christmas.”

Noble called on government to help make a concerted push to drive demand back to previous levels in the new year, stating: “Heading into next year the general public will have most likely forgotten about the past challenges of the solar industry. If government can help the market by getting out the right message – that the cost of solar has fallen in line with the feed-in tariff rate – than industry can settle and build for the future.”

Noble believes that industry and DECC should be aiming to achieve around 6,000 installs a week come spring next year. Noble explained: “The industry has the capability of 6,000 installs a week. We need to find a mechanism to develop that market.”

Another alarming trend identified by the figures is the continued poor performance of the 10-50kW capacity band. Since 4 November, only 16 installations a week have been registered on the central system; combined with the complete standstill of the 250kW-5MW market, a significant section of one of solar’s most suitable markets is seriously underperforming.

Earlier this week, the STA called on government to address the current standstill of the mid-sized non-domestic market following zero installations in the category since July. Noble is clear where the blame for the lack of demand lies: “A FiT rate of 7.1p for 250kW-5MW is incorrect and needs to be put right.”    

The STA has been vocal in its recommendation that the FiT mechanism is the most suitable to support this market. However, in order to address the problem now, Noble suggests that DECC could introduce a separate RO band for ground-mounted solar and a higher band for rooftop-mounted solar.

DECC is currently considering responses to its consultation over the decision to drop support for solar under the RO to 1.5ROCs – a move seen by many in the industry as too severe.  

What are your thoughts on the latest installation figures? Will the domestic market ever bounce back to levels seen previously? What should be done to address the 250kW-5MW market? Let us know in the comments.

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