UK energy supplier Ofgem has confirmed a 3.5% degression for solar PV up to 5MW for the period starting 1 May 2013 until 31 July 2013, as reported by PV-Tech’s sister website Solar Power Portal.
Installations from 250kW to 5MW have decreased from £0.710 to £0.685 even though there has been extremely low deployment in the higher tariff bands. The rates have been cut by 3.5% automatically due to stipulation from the UK Department of Energy and Climate Change (DECC) that if there was no degression for nine months then the tariff would automatically degress by 3.5%, regardless of installation levels.
DECC believes that the automatic degression will help control the boom and bust sequences that had previously plagued the industry.
Industry insiders are concerned that DECC is damaging the large-scale commercial rooftop market. Solar Power Portal states that the solar industry has been heavily critical of the feed-in tariff (FiT) rates set for larger-scale solar under the FiT because the tri-monthly degression model in the country failed to introduce any method to readdress the FiT levels if installation rates flat-lined.
The UK Solar Trade Association (STA) said in a statement that “support of £0.71p/kWh has proved too low to kick-start the market, yet it will reduce in May to just £0.685p/kWh, putting this important sub-sector of solar further out of reach.”
The STA has written to Energy Minister Greg Barker urging him to unlock the potential of the large-scale roof sector under FITs. STA Head of External Affairs Leonie Greene said: “Larger solar roofs are very cost effective and have a major role to play transforming choice for businesses, communities and public sector actors in the electricity sector. If we are serious about Electricity Market Reform and value for money in the UK, then the tremendous potential of big solar roofs needs to be unlocked.”
DECC Ministers are currently considering increasing the maximum capacity for FiT under the Energy Bill. However, STA CEO Paul Barwell has said: “It makes little sense to be looking at increasing the maximum size for FIT-eligible solar projects when it is clear that it is the existing large-scale roof sector that urgently requires attention.
“While DECC have sought to recognise the large-roof sub sector under the RO, the FIT is the best mechanism for actors in the commercial, public and community sectors, who need a user-friendly support scheme. We're in danger of developing an illogical and messy policy framework if we don't deal with the obvious failures under the existing scheme,” said Barwell.
“I urge Ofgem and DECC not to degress these FIT bands in May. We will be writing to Ministers again to explain the importance of these sub-sectors. Furthermore non-domestic solar should not be subject to tight capacity constraints given how cost effective it is now. Constraining its growth, while supporting more expensive technologies, is unfair,” concluded Barwell.
FiT for installations below 50kW have remained unchanged for 10-50kW installations set at £0.1303.