We’ve been alarmed by the latest round of consultations on solar power, and are nervous about the outcomes that may emerge at the end of the month. Putting aside the fact that the consultation was sprung on the industry, the proposal to exclude sub-5MW solar from the Renewables Obligation (RO) altogether was alarming. It would have grossly and unfairly suppressed the technology. The good news is that this proposal was dropped after our association explained the problem.
However, we were left with a consultation that focused on over-5MW solar and that did not explicitly address the economics of mid-size, on-site solar. We estimate that this important sub-sector represents schemes rated at 250kW-1.5MW, and would embrace very chunky roof schemes and ambitious community projects. This sub-sector is cost-effective – more so now than some technologies supported under the RO – so there is no economic logic to suppress its expansion.
The RO is not the best mechanism for on-site solar; the feed-in tariff (FIT) is. However, next to nothing has been installed in the 250kW-5MW band under FITs since it was cut to 7.1p/kWh – an uneconomic level. FIT is the best mechanism for many new actors in energy, who predominantly want an easy way to generate power to consume on site while they get on with their day-to-day business. Given their business activities take place in daylight hours, this is a very efficient way to go about things. But with another automatic cut of 3.5 per cent taking place in May for the over-250kW band, the take-off of this dynamic sub-sector is slipping further away. Yet only a fraction more support is needed.
In fact, the non-domestic roof market for everything over 10kW has pretty much ground to a halt. There is a strong case for deferring the automatic degressions when sub-sectors clearly fail to perform. Otherwise they may never take off.
Serious questions must also be asked to ensure stability for utility solar. There was nothing in the consultation about sustainability standards. Anyone who remembers the first round of FIT cuts will recall how ministers from the Department of Energy and Climate Change (Decc) attacked “supersize” solar. And it was only days ago that a Decc minister publicly contradicted his own department’s energy policy on wind. We are only too aware these days of the damaging propensity of the coalition to conduct its disagreements in public. We do not want that to happen with solar.
Utility developers are professionals who can maximise the performance of any scheme. They can do solar fields responsibly. Cornwall Council produced excellent guidance that we’d like to see widely adopted. We’re producing our own guidance drawing on that work, but we obviously have no powers of enforcement. Planners are very busy. So will this be sufficient? It may take only a few examples of genuinely poor practice with solar fields built on high quality agricultural land for the whole sector to become immersed in controversy. Shouldn’t Decc at least be asking these questions? Clear and high standards, backed by Decc, will protect responsible developers and avoid further stop-start political interventions.
If you don’t ask the right questions you can’t get the right answers. My concern is that, with the Electricity Market Reform (EMR) circus under way, any difficult outcomes for solar may not get attention. That would be ironic given that, for many of the groups campaigning on EMR, this is a vital technology that they want to see expand. It would also be ironic because solar is the most delightfully disruptive technology for transforming ownership and competition in the power markets – something we desperately need in the UK.
But therein lies another article. Why, oh why, has Decc gone about EMR in such an old-fashioned way? Explaining what solar needs right now – and why – may open a lot of eyes to what meaningful electricity market reform really looks like.
Leonie Green, head of external affairs,Renewable Energy Association
This article first appeared in Utility Week’s print edition of 16th November 2012.
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