New Renewable Obligation Certificate banding for medium-scale rooftop solar: DECC

by James Martin II on December 18, 2012

ROC scheme for medium-scale solar projects

The Department of Energy and Climate Change (DECC) has announced its decision about support for solar power after a review of the Renewable Obligation Certificate (ROC) scheme’s banding mechanism. From next year, there will be two separate bands of Renewable Obligation Certificates (ROCs) for ground-mounted and roof-mounted solar systems of medium size. The policy changes are intended to address the differences between them, and will give marginally more support to roof-mounted systems.

What’s new with the Renewable Obligation Certificate scheme?

-Until now, DECC had pursued a policy of keeping support for renewable energy roughly equivalent under the feed-in tariff and ROC schemes. As renewable energy generation project developers can only choose one or the other, these will now be ‘decoupled’ and each scheme will have to be assessed independently by developers to determine which offers the best value. Many in the industry felt that support for medium-scale solar power plants under the feed-in tariff, at 7.1p per kilowatt-hour (kWh), was insufficient. Instead of changing this, DECC has opted to sweeten the business case under the ROC scheme instead.

-Support for the ‘medium-scale’ solar projects (those between 250 kilowatts (kW) and 5 megawatts (MW)) will now be divided between rooftop and ground-mounted solar panels. Roof-mounted systems of this size, usually installed on commercial premises, will receive slightly higher support than ground-mounted systems. The reasoning behind this is that ground-mounted systems tend to have higher power output than roof-mounted solar systems thanks to the fact that they can be optimally orientated and tilted relatively easily and therefore have a stronger business case, but may not always have the ‘bigger-picture’ benefit of offsetting power use where it would do the most good–commercial buildings. It is this big picture benefit that the government is seeking to support in incentivising renewable energy such as solar power.

-Specifically, the ROC will offer the following benefits for systems installed after 31 March 2013:

-For medium-scale ground mounted solar panel installations, a multiplier *of 1.6 megawatt-hours (MWh) will apply. This will decrease to 1.4MWh the following year, and then by 0.1MWH in the following years until 2017.

-For medium-scale roof-mounted solar systems, a multiplier of 1.7MWh will apply, falling by 0.1MWh annually until 2017.

The news is not what the UK’s solar industry had been hoping after the review (a 1.8MWh multiplier for roof-mounted systems), but is better than what had been originally proposed by the DECC (1.5MWh).

Read more about the changes: DECC ROC Banding review

*(The ROC scheme subsidises power production from renewables by mandating that big polluters purchase the certificates, which can only be created by certified renewable energy plants.  The multiplier increases the value of the power produced. E.g. if the plant produces 1MWh of electricity under a 1.6MWh multiplier, the it will receive 1.6MWh of certificates to trade on the market. Multipliers will be wound down as time goes on and the cost of generating power from renewables presumably decreases. Read more here.)

Interested in taking advantage of the benefits of the ROC scheme? Solar Selections manges tenders for commercial-scale solar projects across the UK. Contact us today for more information:

Jarrah Harburn, National Sales Manager

jarrah@solarselections.co.uk

020 7205 2267

© Solar Selections Ltd 2012

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