UK solar market set for bright future

Paul Boughton

Energy and construction experts from across Europe, at a London seminar by PV distributors SunConnex and builders merchants EH Smith, remained positive about the future and growth prospects of the UK solar market. The delegates cited the rise in energy prices and the predicted fall in module costs this year of up to 29 per cent coupled with existing government commitments to carbon reduction - particularly in the construction sector as reasons for 'pragmatic optimism'.

The past12 months has seen DECC fast track large scale cuts to Feed In Tariffs despite stiff opposition from the PV industry and the courts. However delegates considered this to be a natural realignment with the European and wider international markets- the return on investment in the UK, even under the new August tariff, could still reach between 9 and 10 per cent. UK FITs were based broadly in the German EEG FIT scheme introduced in 2000 and originally designed to give a 5 per cent ROI.

Derek Durham, project engineer at SunConnex, said: “The original UK Feed in Tariff was actually extremely generous and frankly not sustainable. If we think of FITs as stabilisers on a bike then I believe we will soon be pedalling ourselves.”  

Delegates saw good reason to remain optimistic, the most recent DECC forecast is for 1m installations by 2015 (based on 4.2GW) whilst a higher scenario could even see 1.2m and 5.5GW.

During the sessions stakeholders agreed the market should also be buoyed by the use of Renewable Obligation Certificates and the industry should be working with DECC and legal advisors to harness Power Purchase Agreements to fund large scale solar farms.

Sustainability director John Cave from EH Smith said that  existing and future legislation such as the government’s commitment to Zero Carbon Housing by 2016, the Code for Sustainable Homes, the Green Deal, Renewable Heat Incentive and the foundations for a buildings emissions tax are all good news for the sector.  

“Construction is the UK’s biggest contributor to carbon emissions. The government has pledged to cut overall emissions 80 per cent by 2050 from 1990 levels and by 2016 every new building will have to have a renewable energy source. The use of Energy Performance Certificates will be hugely important, in terms of laying the basis for a taxation based on carbon and PV can certainly lead the way in providing solutions.

“The much reported Green Deal is also important. Whilst it is not a silver bullet, as a funding mechanism it will unlock a demographic of the population as prospective customers”.

Key note speaker Mike Pitcher, managing director of consultants BFC, said in his speech entitled ‘The case for pragmatic optimism’: “The UK market needs consistency in policy and the communication of policy which we are now experiencing for the first time with the contingent degression mechanism. PV is an integral part of the climate change and energy security jigsaw - it is important to remember that we do not have to use new technology to solve problems when it already exists.

“The Technology Strategy Board has already implemented a £17m programme known as Retrofit for the Future (RfF), to kick-start the retrofitting of the UK’s housing stock against 2050 type levels of carbon reduction and energy efficiency. By 2050 80 per cent of the housing stock we live in today will still exist. This is a huge opportunity for the PV market.”

Philip Elias, commercial manager at SunConnex, said: “It is not business as usual, there is no denying that the UK market is in a transition period. However in Europe since 2011 PV has overtaken wind power and gas for the first time in terms of power generation capacity. We believe that the global and UK forecasts look extremely healthy and for SunConnex, as industry veterans, it is a case of adapts to thrive rather than survive.”

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