While the UK w-industry struggles with the after-shock of the decision by the UK government to accelerate and reduce subsidies for onshore project, the UK solar energy sector now aims to become the first fully subsidy-free renewable power industy.
Already, ground mounted solar power is set to reach “grid parity” by 2020.
And although rooftop solar is following closely behind, it needs a stable UK policy environment to achieve the cost reductions necessary, according to the most authoritative report to date on the future of solar power industry.
The report has been launched by the UK’s largest renewable trade body – the Renewable Energy Association – and business advisory firm KPMG following the announcement of the consultation on the closure of the RO for solar as well as a forthcoming consultation on Feed-in Tariff.
Dr Nina Skorupska, Chief Executive, Renewable Energy Association, said: “We expect this report to play a significant role in helping shape both of these policies.
“The report details solar’s impressive cost reduction in the past decade and models different scenarios to grid parity in the next five years, enabling the industry to continue to develop as direct subsidies are gradually phased out. It also highlights the importance of maintaining support so that the majority of the industry, which includes many small and medium enterprises, will be able to reach grid-parity.
“With government budgets under huge pressure, it is imperative that bill payers’ money and government support is used effectively in the short term, whilst ensuring a low-cost, low carbon future is achievable.
“Solar is going to be a key technology in achieving this, and will be able to compete with traditional fossil fuel generation by the end of the decade if the government provide clear and stable policy leadership.”
The report assesses how solar could make the transition, utilising alternative non-subsidy measures to avoid the market stalling, which would negatively impact companies and employment in the industry.
Skorupska added: “We need to get to the low carbon economy in the most cost effective way, but to do that government and industry have to work together.
“Clear and stable policy leadership is vital, and as robust as solar is, it can still be held back just short of the finishing line by misguided government interventions. This report shows how close solar is to competing with traditional power generation, and with positive government decisions we can ensure the smooth transition from subsidy to business as usual”.
Key recommendations of the report:
- A national energy strategy is needed, incorporating energy storage alongside solar and giving a coherent overview of the grid.
- There is an opportunity to review the FiT and ensure tariffs are set at a level that allows acceptable returns and degressions are clearly set out.
- There needs to be a review of alternative ways to support the solar industry, including for example; the tax regime and net-metering to allow a smooth transition away from subsidies.
Jonny Williams, Director of the BRE National Solar Centre, said: “This report clearly demonstrates the value that solar power is currently bringing to the UK and can continue to deliver in the future under strong government leadership. Its recommendations for achieving a stable future without subsidies for the industry are practical and achievable.”