Solar subsidy changes prompt industry gold rush

One of the world's largest solar companies has almost doubled its UK portfolio of large-scale solar farms in the past three months, in a rush to qualify Government subsidies which have now been removed.

US-owned Conergy has managed to build and grid-connected 12 large-scale solar projects – totalling 230MWp – across the UK in the first quarter of 2015, bringing its nationwide total to 22 solar farms.

It is one of a number of large solar firms that have hurried to connect solar systems to the grid in time to qualify for a 1.4 Renewable Obligation Certificate (ROC), which provides financial support for solar developers.

Munich-based developer BayWa r.e. has brought four solar farms – with a combined output of 85MW – online within the past 12 weeks; London-based solar firm Quercus managed to commission and connect a further three plants (20.4MW) to the grid in the space of a month; and another UK firm, HIVE Energy, confirmed it had completed a portfolio of six solar farms (123MW) in time for the 31 March deadline.

Deadline day

The RO scheme, first introduced by the Government in 2002, essentially helped to create a global market for solar installations in the UK, drawing in large manufacturers from the likes of China and the US.

But this increase in investments prompted the Government to withdraw RO subsidies from large-scale solar farms (those above 5MW) from the end of March – two years earlier than originally planned. So the ROC policy incentive now only supports solar projects below 5MW in England, Scotland and Wales.

According to the Solar Trade Association (STA), as much new capacity was been installed in the first three months of this year as in the whole of 2014. But following this subsidy deadline, the organisation expects installations to fall by up to 80% as most firms will not be able to compete.

Validating its decision to remove large-scale solar subsidies, the Government suggested the solar industry had become successful and competitive enough that taxpayer money could be better spent elsewhere. But the solar sector and green groups disagreed, claiming the subsidy scheme should have stayed as it was in order for solar power to compete financially with the UK’s coal, oil and gas industries – which are all still being supported.

Subsidy scandal

Writing exclusively for edie earlier this week, Solar Trade Association (STA) representative Leonie Greene said the Government’s treatment of non-domestic solar is ‘illogical’ and leaves the industry ‘bewildered’.

“The question is, why? It is surely not, as DECC claims, because solar is breaking the budget. Solar took less than 5% of the RO budget last year and, with stable support, it will be the first renewable off subsidy,” wrote Greene.

“UK consumers obviously stand to benefit hugely from cheap, low-carbon power. Many also stand to benefit from high quality jobs. Recent research for the Department for Business, Innovation and Skills shows the UK solar industry employs 35,000 people directly and indirectly.

“The UK needs to recognise that the technology tide has turned and take a much more serious and tailored approach to supporting this extraordinary technology.”

On the issue of future investment in the UK, Conergy UK’s managing director Robert Goss insists there are still ‘no limits; to continue solar developments across the country. “We will work with our development partners and network to reach and surpass the government’s target for solar of 4% of the energy mix,” he said.

Luke Nicholls

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