Government subsidies driving demand for panels. Expert says fall in price removes need for feed-in tariff review.
Householders rushing to put solar panels on their roof in order to take advantage of government subsidies have more than tripled the amount of solar power in the UK over the past year, figures published on Thursday show.
The lure of making nearly £1,000 a year has led to a record 11,314 people, largely homeowners, installing solar panels in the first three months of this year. The ‘solar gold rush’ appears to have been driven by the introduction of feed-in tariffs (Fits) last year, which pay businesses, groups and individuals for generating green energy.
The total amount of installed solar power in the UK has jumped from 26 megawatts (MW) before the scheme started on 1 April 2010, to 77.8MW at the end of March this year, according to the Department of Energy and Climate Change (Decc). This takes the number of solar photovoltaic systems in the UK taking part in the Fits scheme to 28,505, alongside over a thousand micro wind turbines and just over 200 small hydro sites.
But despite the rise in demand, solar power under the Fits scheme still contributes only a tiny amount of the UK’s total electricity generation. At 77.8MW, it accounts for just 0.104% of the 75GW provided by fossil fuel, nuclear and large scale renewable power plants. The UK’s largest coal fired power station, Drax in Yorkshire, generates approximately 4,000MW.
The surge of installations in the past three months comes despite the government announcing a review of the feed-in tariffs in January, which is expected to reduce tariffs for large-scale solar farms in a bid to protect the scheme for homeowners.
Ray Noble, a solar PV specialist at Renewable Energy Association, told the Guardian: “The vast majority of these installs are domestic and the surge is a result of rising consumer awareness, with people telling one another about solar. It’s not a rush to beat the government’s solar review [announced in January] – most people haven’t even heard of the review. But I think the figures would have been even higher without the review.”
Noble said that a fall in solar costs meant the government could avoid excessively reducing payments large solar schemes by cutting the rate of all solar tariff payments: “The cost of solar is falling, because solar panels are getting cheaper and the labour costs are coming down as bigger players and more competition enter what was once a cottage industry. We think the feed-in-tariffs [currently 43.3p/kWH for solar photovoltaics] could come down by as much as 30% and still make financial sense for consumers.”
The Decc’s figures also reveal that one of the UK’s first mega solar schemes came online at the start of this year. The development, which was over 100KW, compared to around 2-3KW for most householders, is the sort that will see payments reduced under the review’s proposals, which would affect solar installations above 50KW.
Businesses and environmental groups last week attacked the government review for sending the wrong signal to investors. Penny Shepherd, the chief executive of UKSIF, the UK’s leading organisation representing financiers specialising in green investments, said: “One area of particular concern has been the changes to feed-in tariffs [subsidies for renewable energy]. It wasn’t the proposal itself, but the sudden revision that sent out the wrong signal – investors need confidence that [the] policy will remain stable.”
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