UK Solar "“ What Next?
The Department of Energy and Climate Change (DECC) has not yet made a decision in relation to its consultation on ending Renewables Obligation Certificates (ROCs) next year nor on its feed-in tariff (FiT) review. Nevertheless, it is generally accepted within the solar industry that ROCs will end in March (other than for projects which benefit from grace period provisions). The general consensus also seems to be that FiTs will either be scrapped completely or so emasculated, in terms of the rates on offer and limited deployment caps available, that they will become little-used. There is also no news on the prospects of a new auction for contracts for differences and no one is holding their breath in hope.
Despite this bleak news, there was a good vibe at the UK Solar Conference at the BRE on 12 November and the general feeling seems to be that solar in the UK will undergo a hiatus but the industry will soon be in a position to move forward without the need for subsidies. In order for that to happen, equipment prices will need to continue falling and an end to the minimum import price (MIP) would certainly be helpful. However, the indications are that the MIP will continue after this year. It may even be expanded to encompass additional countries to deal with avoidance issues whereby some Chinese suppliers are allegedly setting up operations in other countries to by-pass the regulation. Reductions in equipment prices will hopefully be accompanied by increases in efficiency.
However, the real "game-changer" could be battery storage which is expected to become commercially viable within the next 1-2 years. Battery storage on a solar farm would enable solar effectively to become a baseload technology. This would greatly enhance the opportunities for solar farms to offer a private-wire solution to industrial consumers and thereby avail themselves of a retail price under a PPA. It would also enable solar to take advantage of the revenue streams that are available for baseload technologies. These include the capacity market auction, STOR, balancing services and embedded benefits.
