REC has welcomed the continuous monitoring of the UK solar market by the country’s DECC and appreciates the consultation procedure for the planned changes of the Renewable Obligation (RO) and the Feed-in-Tariffs (FiT) systems.
By this, adaptations for a reliable and affordable renewable energy mix can be better considered and implemented. The government considers closing the RO system two years earlier (on 1st of April 2015) for new solar parks that have a capacity of more than 5MW. Furthermore, it is proposed to split the current FiT degression band for over 50kW and stand-alone installations into two separate bands to increase deployment of commercial and industrial rooftop solar installations.
REC, with its extensive experience in various markets, anticipates that such crucial changes will lead to uncertainties for all market participants and impact the whole UK solar market, which has to now have been one of the more stable ones. This market uncertainty is currently visible in the German solar market. Due to planned changes of the EEG on a short term notice, the solar market has shown a significant drop despite the fact that many solar installations remain attractive even under the new conditions. Therefore, REC recommends that such changes shall be introduced with caution and sufficient lead time. Solar parks with system sizes over 5MW are long-term projects and require on average more than 12 months of lead time.
In addition, the extremely high requirements for solar projects already in progress to qualify for the proposed grace period – which ends on the same day as the announcement of the planned changes, 13th of May 2014 – are unrealistic and counterproductive for the whole market. According to IHS, utility-scale solar projects are expected to make around 60% of the entire PV market in the UK in 2014. Therefore, changes impacting this segment will be crucial for the solar industry in all of the UK.
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