After UK's record solar year, government tries to kill the sector

| 3rd March 2015
M&S's brand new 6MW solar array at its Castle Donington distribution centre is the largest roof-mounted system in the UK.
M&S's brand new 6MW solar array at its Castle Donington distribution centre is the largest roof-mounted system in the UK.
The UK will soon complete a record year for solar installations, almost doubling the nation's solar capacity. But drastic and overtly discriminatory changes to support for renewables may see solar installations collapse to 1% of current levels.
Increasing competitiveness and capacity growth of solar PV in Britain will impact the British power system, including falls in wholesale power prices, as already seen in Germany.

Marks & Spencer (M&S) has just completed the UK's largest single roof mounted solar panel array on its East Midlands automated distribution centre in Castle Donington.

The 6.1MWp solar array comprises 24,272 PV panels, each rated at 250W, installed on the company's 900,000 sq.ft (84,000 sq.m) roof.

It's yet another contribution to the record growth of the UK's solar sector, which now boasts over 650,000 solar installations across homes, offices, schools, churches, warehouses, farms, police stations, train stations and even a bridge.

Official statistics show that total capacity reached almost 5GW at the end of 2014, up from 2.8GW at the end of 2013. At peak production, that's enough to power 1.5 million homes, and approaching 10% of the UK's peak power demand.

But now the government is determined to kill UK solar

Despite the manifest success of the UK's solar industry, the government last week anounced that only five large (over 5MW) new solar installations will be supported under its new  'Contracts for Difference' (CFD) system.

The CFD 'auction', held earlier this year, required 'established renewables' - a category that includes onshore wind, landfill gas, hydro and solar - to compete with each other for a share of £50m for the next year, rising to 65m allocated for future years.

Relative to support for other technologies the sum is minute. The government is spending £3.1bn for under its established Renewables Obligation (RO) support mechanism for 2014/15. And while the RO remains open until 2017 to other technologies, it specifically excludes large-scale solar.

The Solar Trade Association predicts a catastrophic decline in the sector as a consequence. It estimates that 2-3GW (2,000-3,000MW) of large-scale solar will be completed in the current financial year.

But it predicts that next financial year new installations will collapse to just 32MW for all solar PV large and small - around 1% of current levels.

'Blatant discrimination'

Some now accuse the government of "blatant discrimination" against solar power, owing to its unique exclusion from the RO, combined with the paltry sum available under the CFD package. In addition Britain's Green Investment Bank has so far excluded solar power from loans of £1.6 billion for renewables.

The five solar projects selected from the CFD auction came in at the lowest prices of all the 27 winners, at £50 and £79.23 per MWh. Most of the others were onshore wind projects bidding at £82.50. This provides a strong indication that solar is already the UK's lowest cost form of renewable energy.

Making government policy especially paradoxical, say critics, is the fact that solar PV is expected to be competitive with fossil fuel power as soon as 2020, according to the recent report 'In Sight: Unsubsidised UK Solar'. The report recommends:

"Solar PV will be a critical technology in the 21st century, and the British government should continue to support the industry until it is fully economic without subsidies; we believe that this will be reached within the next decade across all solar markets in Britain.

"Support must be reduced progressively and predictably towards elimination over the next decade, to help build a more mature, lowcost supply chain, while maintaining value for money and preventing developers from inflating prices. Getting the right support level is critical to driving sustained cost reductions."

Even Amber Rudd, Minister for Energy and Climate Change, had nice things to say at M&S's solar launch yesterday: "More rooftop solar means more jobs - and will also help deliver the clean, reliable energy supplies that the country needs at the lowest possible cost to consumers."

But in fact, the government is putting the boot in. Why? A clue may exist elsewhere in the report: "Increasing cost-competitiveness and capacity growth of solar PV in Britain will impact the British power system, including falls in wholesale power prices, as already seen in Germany.

"The growth of solar power may threaten electric utilities which fail to transition away from solely supplying electricity, to providing residential energy services."

Could the UK government's apparently senseless policy on solar power be written by the energy companies in direct opposition to the consumer interest in lower electricity prices? So it would appear.

But M&S sticks to its solar guns

M&S's record-breaking PV array will help the company maintain its commitment of sourcing 100% of its electricity for UK and Ireland buildings from renewable sources, with 50% sourced from small scale renewable sources by 2020.

The energy it generates each year - estimated at 5,000 MWh - will provide nearly 25% of the energy required for the distribution centre, and lower M&S's carbon footprint by 48,000 tonnes over 20 years.

As such M&S's solar commitment is driven by its low carbon policy commitment rather than subsidies. Since the launch of its 'Plan A' in 2007, M&S has lowered its carbon emissions by 37% and is carbon neutral across its worldwide operations.

And Hugo Adams, Director of Property at M&S, confirmed that there was more in the pipeline. The completion of this project, he said, was "the first significant step in a number of solar energy initiatives we are planning this year. The scale of the project demonstrates our ambitious goals and long term commitment to onsite renewable energy."

And it may just be that as prices fall, other companies, landlords, schools, local authorities and home-owners will just carry on installing solar anyway, driving down their power bills and carbon footprint - and foiling the attempt by the UK government, in cahoots with the Big Six power companies, to kill the sector off.



Oliver Tickell edits The Ecologist.


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