Thursday, 15 May 2014

Battle Brewing in UK over Solar Funding

A battle is brewing between the government and the Solar Trade Association (STA) over the future of large-scale solar projects in the UK.  At the core of the dispute is a recent government decision to reduce some of the funding for large-scale projects in favour of diverting the money to medium scale and rooftop projects.  If the consultation published earlier this week becomes reality, the changes would go into effect from April 1 of next year.

The proposal from the Department Of Energy and Climate Change (DECC) calls for restricting access to the Renewable Obligation Certificate for any new solar PV projects of more than 5 MW.  Then DECC believes this step is necessary if they are to support medium scale and rooftop projects without adding significant cost to consumer utility bills.  The STA vehemently disagrees.

STA officials are on record as saying the government is using financial management as an excuse to “define the energy mix” in the UK.  They believe the price of solar power has fallen significantly enough that the government is spending much less on the development of new projects than they had originally anticipated.  The STA believes there is no reason to begin limiting funding now.

In order to limit that funding while still supporting smaller scale solar development, the DECC proposal would also separate the current feed in tariff for installations over 50 kW into two categories:  standalone and non-standalone projects.  This would enable the government to make more FIT funds available for rooftop solar installations.  They hope the increase in funding will encourage both commercial and residential property owners to consider opportunities to design and build rooftop solar PV systems to supplement grid consumption.

Picking Winners or Responsible Management

On its face, the dispute between the DECC and the STA seems to be valid on both sides.  The government does have a responsibility to make sure all funding for the solar industry is used responsibly and in a way that provides enough stability to help the industry continue moving forward.  On the other hand, the FTA is legitimately concerned that a lack of funding for large-scale solar projects in the future could dampen industry growth that has, thus far, been very encouraging throughout Britain.

So what's the answer?  That really depends on your view of the type of relationship government and business should have.  What is clear is that there are no easy answers in this current dispute.  One way or the other the different players are going to have to work things out in a way that benefits everyone involved – including UK consumers who ultimately pay for the power produced through renewable sources.

Whether it is wind, solar, wave or biomass power generation, the ultimate goal is to provide a service that consumers can afford.  That might require the government to rethink the way it spends the money they have allocated to renewable energy development. For better or worse, the government is not a bottomless pit of money.



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