One GigaWatt of Solar Installed Across the UK: But What Next?

by Solar Selections on February 28, 2012

The latest installation figures from the DECC reveal a significant milestone has been reached for solar pv in the UK. One GigaWatt (gW) has now been installed and registered across the UK since the start of the Feed-in Tariff scheme in December of 2009. This presents a fantastic achievement by an industry plagued with factors over the last two years and has served as a launch pad for the government’s new target of 20gW by 2020. This article will examine how realistic such a goal this is and how it growth will continue in the coming years.

It is apt that it was the modest 64mW (out of the 1gW total of 1,000mW) that has been installed most recently in 2012 that pushed the industry over this landmark. Hardly indicative of a market on an upward agenda, the FiT cuts that have been made since the rapid deployment rates of November 2011 have clearly been effective in their efforts to restrict growth. Despite this, the rapid scale deployment in late 2011 was enough to see the industry reach this milestone well before many two years ago would have expected. So where do we expect the majority of incentive behind this 20gW target to come from moving forwards into 2012?

April and July – The New Solar Deadlines

If the solar industry learnt many things from 2011 one of the standouts is that a deadline for installations can promote rapid uptake. Understanding the 43.3p tariff is no longer for installations taking place after March 3rd, 2012; there are two important deadlines in 2012 that should result in a similar rush for installations.

  • April 1st 2012 – EPC Introduction and drop to 20 years

The DECC have announced that for all properties looking to install solar power after April 1st, 2012 a minimum environmental efficiency standard will be required. Any property that does not meet the requirements will not be eligible for the full 21p tariff rates. This will mean that additional expenses must be incurred by the property to meet the ‘D’ standard and viably install solar. Improvements to homes include roof or wall insulation, boiler upgrades and efficient lighting installations; all costing time and money. In addition, the FiT will only last 20 years as opposed to the 25 years it currently does. The long and short of it is install before April and get the solar tariff cheaper, easier and for longer – a sure fire incentive for pending and potential projects.

  • July 1st 2012 – Feed-in Tariff Reduction

The full 21p tariff rates will be reviewed and dropped for all installations that take place following July 1st, 2012. How much of a drop will depend on installation figures, but with the risk of a incredibly restrictive 13.6p rate coming into play; this may represent the final opportunity for solar projects to remain economically viable. Due to this, it is straightforward to say there will never be a better time to install solar in the UK than before July 1st 2012 as the tariff is only going to decrease further from this point. Quite simply, this deadline represents the end of the line for a large number of projects and possibly companies in the industry. Get in before you miss this one if you want any chance of solid investment figures from solar.

Grid Parity

All involved in the UK PV industry hope that the July reductions do not constrict the economic benefits of installing solar too heavily. In between the lobbying and praying that will occur though there is a light on the horizon following the outcome of July 2012: Grid Parity. What this phenomenon refers to for solar power in the UK is the point whereby installing solar makes economic sense compared quite simply with not installing solar. Irrespective of any FiT’s, grants or loans, the lowered upfront capital outlay in combination with the higher energy savings and earnings results in a situation where any property owner wishing to be better off will install solar power on their properties.

Thanks to the increasing costs of energy and fuel, many countries the world over are approaching solar grid parity. It is the tipping point for a new technology – the time when it comes into it’s own as a necessary aspect of infrastructure and development. Experts are predicting that this will take place around 2015 in the UK. With any luck, the July 2012 cuts will be blunter than expected and parity arrives as soon as possible.

Until then, the smart money is on beating one of the new deadlines and having your system largely paid off before that point arrives.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

020 7205 2267

© 2012 Solar Selections Ltd

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