Solar industry welcomes DECC's revised support package
The Government has announced a revised support package for the solar photovoltaic (PV) industry today following discussions with industry associations.
DECC has decided to reduce support for solar power under the Renewables Obligation (RO) from the current 2 ROCs to 1.6 ROCs from April 2013 - a reduction of 20% - rather than the initially proposed 1.5 ROC's.
Energy and Climate Change Secretary, Edward Davey, said: "We want to see a healthy solar industry that grows in a sustainable way. That's why our support levels reflect the fall in the cost of the technology".
Supported under the Government's RO, building-mounted solar PV projects will receive higher rates than ground-mounted projects, which DECC says will encourage the installation of solar projects at large factory or warehouse buildings.
Minister of State for Energy and Climate Change, Greg Barker, said: "We have listened to industry about the need to differentiate support between building mounted and ground mounted installations and we have introduced two bands as a result.
"Our proposals for solar projects on commercial buildings will encourage businesses to consider solar PV as a serious option for meeting their power needs," he added.
Responding to the announcement, the Solar Trade Association (STA) said it had recommended an initial cut of 10% to 1.8 ROCs to ensure continued expansion of deployment. However, the association welcomes the improved degression rate from previous proposals.
STA CEO Paul Barwell said: "There are pros and cons here. We are somewhat disappointed with the decision on the level of ground-mounted support for 2013. We brought DECC and the industry together to provide the data needed to make an evidence-based decision. But DECC has at least agreed an improvement on previous proposals and the degression rates are much more sensible.
"However, it means that solar deployment could be overly constrained when, even with a fraction more support, it would still be cheaper than many other low-carbon technologies. It is difficult to understand why the Government is aiming for 'slow growth' in this cost-effective technology when we have a challenging renewable energy target to meet," he added.
DECC also announced decisions to ensure that the RO brings forward new biomass projects that are both cost and carbon effective. DECC said the support set out could unlock investment decisions worth £600m, creating around 1,000 construction jobs.
Davey said: "Biomass will make a significant contribution as we seek to increase the amount of cost-effective, low carbon renewable power in our energy mix."
Commenting on DECC's decision, Renewable Energy Association (REA) chief executive Gaynor Hartnell said: "REA has been listened to on the proposed cap on new biomass projects. Instead of implementing legislation that would have stopped investment in its tracks, DECC is taking more of a 'wait and see' approach, with the option of consulting if deployment exceeds 400MW.
"Today's decision recognises the substantial contribution that these projects can make to delivering cost effective carbon savings and steady baseload output," she added.