The deployment of and subsequent feed-in tariff degression levied at sub-5MW standalone projects is causing “significant concern” for the future route to market for such projects, according to Solar Trade Association business analyst David Pickup.
The Department for Energy and Climate Change released MCS and ROOFIT accredited deployment statistics last week, revealing that more than 56MW of solar farms under the standalone category has been deployed in the current quarter.
That rate of deployment has triggered a minimum 14% degression to the feed-in tariff with more than a month left in Q3, and Pickup warned further deployment as expected would double that reduction.
“Just 15MW more in August and September would take degression to 28% as we had anticipated, leading to a tariff from 1 January of 3.08p. Together with the proposed closure of the <5MW RO, we have significant concerns about the long-term route to market for sub-5MW standalone projects,” he said.
DECC is currently consulting on plans to close Renewables Obligation support for sub-5MW solar farms a year earlier than planned in March 2016, while the removal of grandfathering effectively shut off the planning application deadline on 22 July.
The small-scale feed-in tariff would be the only means of support for ground-mount solar farms up to 5MW in size, however the government has also sought to cap their deployment by consulting on the cancelling of pre-accreditation. This means projects would not be guaranteed a FiT until they connect to the grid and start generating, rather than being able to obtain a conditional rate prior to the start of development.
Pickup said the vast majority – 84% – of standalone deployment within the current quarter was pre-accredited, something which he said highlighted its importance just as the consultation to remove it expired.
Last week the STA was one of seven renewable energy trade associations to co-sign a letter to energy and climate change secretary Amber Rudd conndemning the decision to remove pre-accreditation prior to the consultation’s closing. DECC has said it intends to publish the result of the consultation “as soon as possible”.
Pickup added that the deployment statistics also continued to highlight the lack of growth on commercial rooftops but did note that the domestic market remained stable. “All eyes will be on the comprehensive feed-in tariff review due out soon,” he said.