The Solar Trade Association (STA) has warned that the UK must adjust its solar policy framework to help mitigate the impact of the recent trade agreement between EU and China.  

The STA has warned that the reported deal would leave non-domestic solar ‘out of kilter’ with UK policy framework as the price of solar modules would be ‘fixed by Brussels bureaucrats for 2.5 years’.

Although not finalised, the STA believes that a minimum price of €0.56/W will be implemented alongside a cap of 7GW. The STA has warned that the stated minimum price would severely affect the economics of large-scale solar in the UK. Contrary to reports, Solar Power Portal understands that the terms of the agreement may include a fluctuating price guarantee.

With support under the Renewable Obligation set to drop to 1.4ROCs next April and non-domestic installations struggling under the feed-in tariff (FiT) scheme, the STA has serious concerns that the mooted deal would further curtail the non-domestic market.  

Commenting on the deal, STA PV specialist Ray Noble said: “We urge the UK government to amend this proposal by calling for a shorter duration for this deal, fluctuating or lower minimum prices, and allowing for volume growth and cost reductions.

“Otherwise the UK policy framework will be increasingly out of kilter with real world costs. In these circumstances we need the UK government to adjust its solar support framework. Otherwise we will see little solar deployment in the UK, even though large-scale solar is cheaper than other energy sources like offshore wind, biomass CHP, wave and tidal.

“It would make little sense from a public value-for-money perspective for the UK government to allow the solar industry to grind to a halt because of Brussels meddling.”

On the other hand, the domestic market should escape relatively unharmed according to the STA. Due to solar panels making up an increasingly smaller component of installation costs the association is not predicting as big an impact on the sector. However, the STA is calling on the Department of Energy and Climate Change (DECC) to reconsider the current degression mechanism.   

“Thank God we've moved a long way from the original proposals, which were truly appalling and without justification. However, we’re concerned that the deal reached by China and the Commission will ultimately achieve little, as German manufacturers are unlikely to be able to compete long-term with the Asian giants,” commented Paul Barwell, CEO of the STA.

He continued: “In the short term, the proposals could do real damage to the UK downstream solar industry and to national deployment levels. They leave the UK non-domestic solar industry in a very difficult position, when in fact the UK is one of the major EU growth markets, and ought to remain so.”