UK Solar and Storage: Finding Common Ground in a Post Subsidy Era

This year’s Clean Energy Live conference reflected the effort of solar PV and energy storage to find common ground in the post subsidy era that the UK market has entered.

Showcasing significantly fewer solar developers than in the previous years and offering instead a plethora of energy storage products and services, Clean Energy Live, held in Birmingham, England, on Oct. 4-6, made it clear that the point of focus of the UK’s clean industry currently is smart technology systems.

Solar has been the victim of acute subsidy cuts that took either the form of phasing out old schemes — specifically concerning the large-scale segment of the market — or drastically reducing others, most notably the feed-in tariffs (FITs) scheme that concerns mainly residential and commercial rooftops.

Within this landscape, solar PV technology is currently adding new solar farms only via licences of the old scheme for projects that are grandfathered. Grandfathering old licences is going to end in March 2017, and there are only few such licences remaining in the market.

The dominant part of the solar PV market today in the UK is residential rooftop installations that still receive FITs, albeit reduced, Finlay Colville, head of intelligence at Solar Media, told the conference. However, Colville added, these have been drastically reduced in number, reaching the levels of new installations we saw a few years earlier when the scheme had just commenced.

The biggest disappointment, Colville noted, is in large commercial rooftop installations — systems larger than 50 KW.

“This market never really went anywhere in the U.K.; FITs changed so quickly that companies didn’t have time to establish a business model,” he said.

Given the government does not plan to make any step back from its subsidy-free or ‘subsidy-little’ policy for solar, most project developers try to combine it with storage on site, thus altering their business model. Storage can benefit both large-scale ground mounted farms and smaller rooftop systems and has already made an appearance in the UK both in front of or behind the meter. A variety of new players, ranging from small utilities to power aggregators to asset developers, try to make their product and services more economic by utilizing smart technologies, including storage and demand-side response. These companies took the front stage in the show.

The most urgent demand of the solar and storage sector is government regulation that allows smart configurations to enter the market and compete on a level playing field. There was a little positive signal when the UK’s energy minister Neville-Rolfe told the show that the government “will shortly publish a call for evidence on a smart systems road map, including sections on storage and innovation.”

Very disappointingly, she was not able to specify when and most crucially what the government’s plans are for the smart energy sector, and what she aims to achieve with the forthcoming call of evidence.

The only certainty that Neville-Rolfe provided about where the UK is heading through 2020 is that “we are heading out of the EU.”

Her statements on Brexit were received from the audience with silence, not even a clap. On the contrary, on the show’s grounds, smart energy start-ups were speaking enthusiastically about their innovations and what their technologies can do, however also admitting how difficult Brexit has made it for them to attract financing. The UK’s clean energy sector has not only to face the non-subsidy era, but the consequences of Brexit as well.

Lead image credit: Ilias Tsagas

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Ilias started writing for Renewable Energy World in February, 2014. He is also a correspondent for other publications, mainly reporting on electricity market developments and the role of renewable energy and energy storage. His geographic area of expertise include Europe and the Middle East and Northern Africa (MENA) region. Ilias is also working towards a PhD at the University of Greenwich (Business School), looking at the UK's Electricity Market Reform. He currently lives in London.

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