By Dr Seb Berry, former Vice-Chairman Solar Trade Association.
In the run up to Budget 2021, the UK solar industry has been increasing its lobbying efforts. Rooftop solar PV in particular has been neglected in policy terms since the demise of the feed-in tariff, with no clear Government strategy for the industry in place since the end of the coalition period.
This policy neglect has been surprising given a backdrop of ever cheaper solar PV installations, the huge popularity of the technology, the scope for immediate green jobs creation, and the Committee on Climate Change estimate that the UK will need to see a virtual quadrupling of solar PV deployment (from 14GWp to 54GWp) by the mid-2030s to achieve the net zero target.
Last week, a coalition of NGOs working in the energy and environmental sectors, including Greenpeace, E3G, Friends of the Earth, WWF, Possible and CPRE issued a joint statement calling on the UK government to set a minimum deployment target of 40GWp by 2030, entirely consistent with CCC projections. The joint statement urges the government to work with the industry to build on the successes of the sector to date, which includes meeting more than 11% of total UK electricity demand in May 2020 and hitting a new all-time peak generation record of 9.68GW last April.
Chris Hewett Chief Executive of Solar Energy UK points out that “utility scale solar is now the cheapest way to generate power in the UK, and there is a strong pipeline of projects being developed, many of which also include energy storage. Solar Energy UK believes that the country can easily achieve 40GW of solar by 2030, trebling the capacity in a decade. There is a growing demand, from corporate and public sectors, to source their power from renewables, either generating onsite, or via a contract which enables new solar parks to be financed. More could be stimulated via annual CfD auctions for solar.”
Despite evidence of the resilience and optimism of the sector however, (adding 545MWp of capacity last year,) this is still a long way short of the annual deployment necessary if it is going to get even close to delivering the CCC numbers by the mid-2030s. The joint NGO statement emphasises that policy changes to support for the sector will help ensure that the potential of the industry to deliver cost-effective, jobs rich projects is realised, contributing directly to the Government’s plans for a ‘Green Industrial Revolution.’
The NGOs are calling for an annual capacity target of 5GW of solar power to be delivered through annual Contract for Difference (CfD) auctions for the duration of this Parliament, and that government should guarantee solar’s inclusion in a long-term CfD mechanism, to encourage longer-term investment in the UK market. The inclusion of solar in the next CfD auction round after a six-year absence is clearly welcome, but it is also vital that the industry has at least medium-term confidence to plan and invest for future auction rounds.
On rooftop solar, Solar Energy UK and the NGO coalition are calling for urgent government action to boost domestic solar deployment particularly in the retrofit market, which slumped to around just 50MWp in 2019/2020 following the closure of the feed-in tariff. This includes making solar energy and storage zero-rated for VAT, changes to the Green Homes Grant scheme to extend the means-tested element of the scheme to include solar and storage, and ensuring that the new National Investment Bank provides capital support for 0% interest loans for home green retrofits.
As Chris Hewett of Solar Energy UK observes, there is a growing gap between the potential for solar in newbuild resulting from recent building regulations changes, and the unhelpful policy treatment of retrofit solar. He emphasises that “recent changes in building regulations will mean by 2023 nearly all new homes in England are likely to be built with solar on the roof. As electrification of heat and transport expands during the decade, government policy should be geared towards integrating solar energy onto existing buildings. This could be done via an extended and improved Green Homes Grant, access to zero interest loans or zero-rating VAT for solar energy and battery storage.”
In the absence since 2015 of a government strategy for solar and no sector deal of the type enjoyed by the offshore wind industry, we will see how far Budget 2021 goes to delivering any of these policy changes, in the run up to COP 26. A Government committed to net zero, green jobs and accelerating the uptake of cost-effective renewables through the 2020s, should be embracing the potential of solar and putting in place now the practical measures necessary to boost uptake of the technology.
