Despite the intention of this proposal to curb installation what we risk facing is booming installations of solar before the ROC scheme would expire, between now and 1st April. — Josefin Berg, Senior Analyst for Solar Power, Power and Energy Division, IHS Technology
Independent supply companies also expressed dismay, for example Juliet Davenport, founder and chief executive of Good Energy, said: “This will undermine growth, investment and jobs in a sector which is helping to introduce more competition and new players into the energy market. This decision will bring further instability and uncertainty to investors, and we will have to reconsider our portfolio of investments as a result.”
Davenport added: “The solar sector needs a stable policy framework from which to grow — we believe if properly supported now, it could compete equally on cost with other technologies by the end of this decade. What it does not need is revised levels of support and political uncertainty, which will serve only to stifle investment, growth, competition and ultimately, the opportunity to make a meaningful low-cost, low-carbon contribution to the UK’s longer-term energy security.”
Considering the market outlook a recent analysis of the U.K. solar PV sector by IHS indicated that the UK’s solar strategy, together with prevailing investment conditions for ground-mount PV plants, were expected to drive total UK PV installations into the 2.5- to 3-GW range annually until 2018. In 2014, IHS said it expected 2.4 GW of new PV installations with an estimated 922 MW of utility-scale PV projects installed in the U.K. in the first quarter of 2014.
By 2018, IHS had forecast the UK to have 16 GW of installed PV capacity with utility-scale installations peaking in 2014 at a total of 1.5 GW.
However, having already raised its near-term forecasts for the U.K., in the wake of the new proposals Josefin Berg, senior analyst Solar Power for IHS Technology’s Power and Energy division, explained to REW: “Despite the intention of this proposal to curb installation what we risk facing is booming installations of solar before the ROC scheme would expire, between now and 1st April so we are revising up our forecast for this year for the first quarter quite dramatically because we do see the potential for a very strong rush.”
IHS is currently revising the 2014 PV forecast for the U.K., pending the results of the consultation, noting that several scenarios exist for the future of the U.K. utility-scale PV market.
IHS believes that the announced end of the ROC scheme will lead to an installation rush of ground-based PV projects for the remainder of 2014, and more importantly in the first quarter of 2015. The company estimates there are nearly 5 GW of projects in various stages of development. Exactly how much of this capacity that can actually be installed will hinge on local permitting, the ability to sign power purchase agreements and access to finance, but the group estimates that nearly 3 GW of new utility-scale systems could be installed over the coming nine months.
Post-April 2015 the sector is looking far less rosy, though the full extent of the proposals have yet to be calculated given the plans are still at the consultation stage. Utility-scale PV activity will be limited to projects approved for the grace period. Further on, utility-scale PV deployment will hinge on the size of CfD auctions capacity allocations, and the ability of PV to compete with bids from other renewables sources such as on-shore wind. Nonetheless, Berg warned that solar faces a future CfD market in competition with other renewables — the details of which are still to be determined. “It’s hard to say if solar could have a role,” she concluded.
Ian Glover, general manager of ReneSola UK, commented: “We are disappointed that the ground-mounted PV market is likely to contract, as we have seen some excellent examples of how ground-mounted PV can benefit both communities and investors. Such projects have also helped to sustain a large number of jobs in this sector, and the transfer of interest into new sectors may not necessarily absorb all of these jobs."
Image: Wymeswold utility-scale solar project. Photo by David Appleyard.