The increased deployment and installation of ‘behind the meter’ (BTM) assets will be pivotal in the shift to a decentralised energy system. Rooftop solar (coupled with battery storage assets) in particular, will be vitally important in enabling households’ transition from being ‘consumers’ to ‘prosumers’, revolutionising our relationship with energy.
With the electrification of transport set to play a major role in this ‘prosumer revolution’, the deployment of decentralised energy assets such as rooftop solar and batteries will become all the more essential. Energy generated and consumed locally will be necessary for us to bridge the gap created by the increased future demand from EVs, and with that an even greater demand on the grid.
Bridging this gap represents a major economic opportunity. From an investment perspective, the deployment and development of rooftop solar and battery assets will require considerable levels of capital. SMEs will be the natural drivers for the future deployment of these assets, as they will be able to facilitate faster growth in deployment, capacity delivery and the development of skills. This will all help to drive a skills agenda that will lead to sustainable new jobs and spur economic growth in the low carbon space.
Ensuring 'critical private investment' through policy
In order for us to take full advantage of this opportunity we need the right policy environment to ensure critical private investment. Though costs have reduced dramatically, they still remain a major obstacle for the deployment of rooftop solar in the current regulatory environment. Whilst new technologies and sources of generation will always identify new cost efficiencies as the level of deployment increases, this is not an instantaneous process. As such, consistency by government with a few small adjustments to existing policies - such as maintaining export tariffs, the Feed-in-Tariff (FiT) to enable a structured approach to installation, and extending the Green Deal to include batteries - may well be sufficient to accelerate rollout across the UK.
The environment as we know it is currently undergoing significant change. In recent months, the government has consulted on its plan to close the FiT scheme for new applicants as of April 2019, potentially putting the rooftop solar opportunity at considerable risk. A recent survey by the Renewable Energy Association (REA) found that 40% of respondents said they would have to reconsider remaining in the sector if the proposed closure goes ahead.
At the Labour Party Conference only a few weeks ago, the party’s leadership expressed support for considerably higher levels of investment into the low carbon economy. While this is positive, Labour’s broader energy policy proposals, including the (re)nationalisation of parts of the sector, would inevitably create considerable uncertainty among investors. If such a policy were to be implemented, investors may reduce or limit their future investments as a result.
Ultimately the UK needs a long term energy policy framework based on a clear cross-party consensus in order to achieve the low carbon economy we all wish for. An energy policy that provides clarity, consistency and continuity will support the future private investment in low carbon infrastructure needed to truly realise decarbonisation.