The solar industry has hit out against plans by the government to cut support for solar PV installations by up to 25 per cent under the Renewables Obligation (RO), describing the proposed levels of reductions as “too big and too soon.”
The Solar Trade Association (STA) said plans to slash support from 2 Renewables Obligation Certificates (ROCs) per MWh until April 2015 to 1.5 ROCs/MWh next year for the technology are unfair and not in the public interest as they will hold back a cost-effective technology.
The Department of Energy and Climate Change (DECC) released its consultation levels on banded support for solar PV under the RO – the government’s main financial mechanism for large-scale renewable electricity generation – on Friday (7 September) afternoon, citing a “cautious approach” to levels because the pace of falling solar PV costs had been “consistently underestimated.”
But the STA’s CEO Paul Barwell said the new levels – which are considerably lower than those set out in last October’s RO Banding Review – meant the industry was once again having the rug pulled from under it.
“The proposed 25 per cent cut is too big and too soon. We understand DECC have concerns about how solar will interact with other renewable technologies under the RO, and how it will influence the budget, but deliberately under-rewarding solar to curtail the industry is definitely not the solution,” he said.
“This is not a fair proposal and it is not in the public interest to constrain a cost-effective technology.”
The STA also expressed concern over DECC’s failure to decide whether to issue a separate consultation on plans to exclude solar PV projects below 5MW from the RO.
It said that it is “vital” that both consultations are considered together to ensure a “coherent and ambitious framework for solar.”
The Association is setting up a Large Scale PV Group which will include installers, developers and investors in order to provide detailed feedback to government on the consultation, but added it was particularly concerned by mid-sized schemes, a fledgling area of the sector.
Seb Berry, Head of Public Affairs at Solarcentury, said he objected to the consultation as it failed to provide certainty or confidence for solar PV developers.
“The sector will have to wait until the end of November for certainty on the ROC rate from April 2013 and beyond,” he told E2B Pulse. “With large-scale projects typically having a nine months lead time, DECC is already creating an entirely avoidable hiatus in the market for at least the first quarter of the next financial year, regardless of the outcome of the consultation.”
He added: “The proposed 1.5 rate flies in the face of all of the advice that we and other companies involved in the large-scale PV sector have given. If DECC is serious about its 22GW ambition and serious about the role that solar parks and other large installations can play in delivering that, it makes no sense at all to propose the RO equivalent of a feed-in tariff rate that is of no interest to investors.”
The proposed changes would apply to projects accredited under the RO scheme on or after 1 April 2013, and responses to the consultation are open until 19 October.
By James Kershaw. Originally posted on E2B Pulse.