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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.

Following the release of the Government’s response to the Feed-in Tariffs (FITs) consultation and the news that it has just launched a consultation on the budget management and environmental sustainability of the non-domestic Renewable Heat Incentive (RHI), Tom Vosper, Head of Climate Consulting, says:

“The Government has clearly listened to feedback, especially in regards to support for the community sector. However it’s clear from its comments that the Government understands there are issues still to be dealt with, primarily the difficulty faced in researching and developing projects due to the associated costs. Removing the requirement for achieving an EPC level D or above will certainly help community organisations to progress worthwhile projects with more certainty.

“Despite the increased level of administration, we also welcome the preliminary accreditation system as it will give confidence to project developers. However as this preliminary accreditation system will mainly benefit larger individual systems, it won’t entirely reverse the slow-down in the PV market because a large amount of the investment in this sector has come in the form of “funds” for multiple installations rather than one-off projects.

“We believe some of the available heat technologies would benefit from a similar preliminary accreditation system, and would like to see one introduced for the non-domestic RHI.”

Engineers are calling on the Government to increase the remit of the Green Investment Bank. The Coalition has signalled their intent to direct the Bank’s fund towards investment in low carbon technology. But, Europe’s largest professional group of engineers, the Institution of Engineering and Technology (IET), is arguing that the Bank should also support energy efficiency innovations in the manufacturing sector.

The investment mandate for the Bank is to deliver the Government’s aims on economic growth, facilitate the transition to a green economy and support the UK’s industrial transformation. Much of the focus to date has been on investment in the manufacture of low carbon goods and the rollout of green infrastructure.

Dr Tony Whitehead, Director of Policy at the IET said: “Energy conservation and efficiency should be amongst the first priorities of a sustainable energy policy.

“Energy is set to become increasingly expensive in the future, and to survive in the global market, UK firms will not only need to produce new products, but to produce them at competitive prices. This means driving costs down wherever possible.

“The manufacture of low carbon technology is often seen as a panacea to meet the UK’s carbon reduction requirements whilst at the same time creating a renaissance in UK manufacturing. Yet the manufacture of low carbon goods is not in itself automatically green. A green industrial revolution should first focus on greening manufacturing processes to reduce energy and resource use.

“For the UK to achieve its targets on carbon emissions there needs to be extra support for green manufacturing processes. Energy conservation and efficiency in the manufacturing sector should be a priority for the Department of Business, Innovation and Skills and more widely across government.

“In addition, access to the Green Investment Bank by SMEs will be paramount. SMEs are able to develop and commercialise products rapidly in niche areas. By its very nature, green technology and processes will require innovative solutions; an area where SMEs can develop a competitive advantage for UK plc. SMEs should have priority access to the Green Investment Bank to spur green growth and technology.”

The UK feed-in-tariff announcement has generated a lot of interest in solar energy for homeowners. But what of the interest for organisations such as farms, businesses or local communities?

Some in the press have criticised the government’s proposed feed in tariff plans because they do not offer specific incentives to businesses as well as private individuals.

I would argue that the feed in tariff as it stands applies equally well to enterprises as it does homeowners. Businesses are often able to think longer term about investments. The incentives for installations above 50kW are still attractive for commercial roofspaces, especially if businesses use the electricity they generate for themselves, meaning that installing solar would be a prudent investment to have on a balance sheet. That is not to mention the kudos that comes with being a net exporter of green electricity.

In Germany the commercial rooftop segment of the market is the largest by volume, and with a feed in tariff pricing that now looks rather similar to the UK’s. We may therefore expect that companies start to explore using their roof space for PV. In fact if they haven’t thought of it yet, someone else will soon be approaching them with an offer.

That’s not to say the governments plans are flawless however. The UK is still pitifully behind the rest of Europe when it comes to renewable energy generation and particularly microgeneration.

Still lurking in government policy the ridiculously low target of 2 percent of energy coming from microgeneration by 2020. This is incomprehensible given that Germany is already at 4 percent from solar and other countries like Denmark with biomass gain nearly 40 percent from microgen. Surely this target must be revised!

Speaking as a professional in the global solar industry, the new UK feed in tariff has put us on the radar (a bit). Rather than smirking when I mention the potential for solar in the UK, my colleagues are now starting to take some interest…