A solar farm in Germany - will we see the like in Britain?
OK, I can understand that incentives for carbon reduction should be focused on householders. After all there are some 26 million existing houses in Britain that need attention over the next forty years. However there is only so much that can be achieved by improving fabric insulation and installing solar panels. For a start the take-up of the Green Deal is far from certain, whilst many houses will be hard to improve, particularly those with solid walls or inaccessible loft spaces for example.
Despite extensive condemnation and compelling evidence from numerous parties who contributed to the consultation process, the Government is going ahead with their unscheduled modifications to the Feed-in Tariff for photovoltaics. 57% of 466 respondents disagreed with the change, whilst 81% of 442 disagreed with the new bands. The Government’s reason for ignoring this can be summarised by the following quote from its response: ‘the need for fiscal responsibility across all areas of Government spending is a key objective of the Coalition Government.’ FITS
This will effectively close the door on larger installations. The schemes that will be impacted include community installations and solar farms that could have contributed significantly to decarbonising the grid: an essential component of the Government’s legal mandate to an 80% reduction in carbon emissions by 2050.
Contrarily it now seems likely that there will be two opportunities for householders to benefit from Government funding for renewables. As well as the current FIT of 43.3p/kWh for electricity generated from small PV installations for example, along with 3.1p for each unit exported to the grid, householders should be able to obtain loans via the Green Deal. “the Energy Bill (2011) makes clear that the Green Deal may cover measures which generate energy as well as those termed “energy efficiency” measures. If a measure is capable of paying for itself because occupiers use less energy as result of the installation – then it can potentially qualify.” Greendeal
However the Treasury has proposed that subsidy through Enhanced Capital Allowances (ECA) be removed from renewable technologies. In their consultation, which closes 31 August 2011, they assert that ‘expenditure could not qualify for an ECA where it is incurred on plant or machinery that could qualify for a tariff payment under either of the FITs or RHI (Renewable Heat Incentive) schemes.’ ECA
The Government is about to commence a further review of Feed-in Tariffs and Renewable Obligations due for completion by the end of this year. With this in mind DECC have commissioned a report from Arup, which was published earlier this month. Renewables
It is interesting to note that this report anticipates a growth in PV in line with historical trajectories for PV installations in Germany. With precisely zero solar farms commissioned in the UK to date and the likelihood of new ones in the future seriously diminished this does seem unlikely. The burden is likely to fall primarily on the offshore windfarm sector to meet the Climate Change Committee (CCC) Renewable Energy Review target of reducing carbon emissions through electricity generation from the current 500 gCO2/kWh to 50 mg by 2030.
CCC
This is recognised in Table 1.1 of this important report, which lists PV under the heading of ‘Technologies that could play a major role in the future UK mix, with limited role for UK deployment in developing the option’ (my underlining). In other words the CCC considers that electricity from solar farms is likely to be imported from overseas suppliers in the longer term, provided the replacement regime for ROCs covers imported renewable electricity.
The critical role of Government in this complex situation is to ensure that the balance is correct between cost effective investment in decarbonising the grid and improving the efficiency of both new and existing homes, whilst ensuring subsidy and loans reach the parts they are intended for.
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