The latest feed-in tariff statistics published by the Department of Energy and Climate Change (DECC) suggest that the FiT rate for standalone solar PV installs will degress on 1 July 2015.
The government statistics show that 98.18MW of standalone capacity has been installed in 2015 under the feed-in tariff already, enough to trigger a 28% degression on April’s 6.16p/kWh FiT rate.
The resulting degression would see the feed-in tariff rate for standalone projects plunge to 4.43p/kWh from 1 July 2015.
A degression to the standalone PV rate has a large implication for those companies looking at developing solar sites over 5MW with split ownership between community and developers. Ofgem and DECC recently confirmed that, as of 1 April, two projects with a capacity up to 5MW each can share one grid connection point, as long as one of the sites is owned by a community organisation or charity.
Commenting on the implication of the latest deployment figures on split ownership projects, Lee Richards, programme manager at Regen SW said: “In order to avoid the impact of this degression, developers considering split ownership projects with communities or utilising a shared grid connection will need to get these schemes pre-accredited under the ROO-FiT process with Ofgem by 30 June 2015, in order to receive a FiT rate of 6.16p/kWh.”
Speaking to Solar Power Portal, Paul Barwell, CEO of the STA, added: “A degression of 28% in the standalone band shows that we are now, as we predicted, entering the era of tariff hyperdegression.
“The problem is that there will now be a big rush to meet the 1 July deadline to get the 6.16p tariff which is certain to in turn create another 28% cut in Q4.
“We at the STA have been warning for over a year that there is a real structural problem with the FiTs and a complete lack of capacity in the rooftop and ground mounted bands to allow for meaningful growth. Our Solar Independence Plan, which we have presented to the industry and DECC officials over the last six months and will soon be publishing in a detailed report sets out how the new government can address this.”
Barwell continued: “The FiT is perfect for community-led schemes because it is a user-friendly support scheme. This degression will be a let down for all the community groups that the solar industry has worked so hard to engage and attract to solar – and that the government has wanted us to engage. The only consolation is that DECC has at least split the standalone and roof mounted sectors, so that the tariffs for rooftop solar are not affected by this degression for ground mounted solar.”
Ray Noble of UK Solar added: Given time, the industry will no doubt be able to adjust to this tariff reduction. In the meantime there will be a rush to deploy before July, and pre-accredit wherever possible. This maintains the present tariff for up to six months. The new government should take note of what solar is capable of delivering, not only in terms of electricity but also in jobs. This is another step on the way of it being the cheapest form of electricity generation.”
The potential degression will need to be confirmed by Ofgem when it releases its official statistics for deployment.