Solar PV is an important part of the UK’s energy portfolio. The sector has seen very strong growth in recent years, due to support from the Feed-in Tariff (FIT) scheme and the Renewables Obligation (RO), as well as from costs coming down rapidly as a result of global developments. The Government has confirmed it commitment to meeting objectives on cutting carbon emissions and to continue to make progress towards the UK’s 2020 renewable energy targets.
The Government’s plans for meeting the renewables target include an ambition for at least 30% of electricity demand to be met by renewable sources. We are currently on track to meet this aim. Expenditure on policies to support renewable and low carbon electricity generation is governed by the Levy Control Framework (LCF), covering the period up to 2020/21. The LCF allows Government to control public expenditure paid for through consumers’ energy bills, and reflects the importance Government places both on keeping bills affordable and supporting renewable and low carbon electricity generation.
The LCF has provided significant financial support to the renewable sector, helping new and innovative technologies while increasing the amount of low-carbon electricity that powers homes and businesses across the UK. However, in real terms (2011/12 prices) current LCF forecasts are equivalent to an increase from £7.6bn to £9.1bn in 2020/21.It is therefore necessary for DECC to take action to control costs.
This consultation proposes:
- Closing the RO early in Great Britain to new solar PV projects of 5MW and below, and to additional capacity added to existing accredited stations up to a total of 5MW total installed capacity, from 1st April 2016;
- Grace periods for developers who either have obtained preliminary accreditation on or before 22nd July 2015, or have made significant financial commitments to projects on or before 22nd July 2015, or experience grid connection delays that are outside their control. The grace periods would allow projects to enter the RO on or before 31st March 2017;
- Removing grandfathering for new solar PV projects on 5MW and below, and additional capacity up to a total of 5MW total installed capacity, that are not accredited under the RO as of 22nd July 2015;
- The Government’s intention, subject to the present consultation, to publish proposed bandings for new solar PV projects of 5MW and below for further consultation.
The Government is seeking feedback on whether consultees agree with the proposals and the cost projections that inform this.
The closing date for submission of responses is 2nd September 2015 and we welcome your responses by email to compliance@carbon2018.com or call Melanie Kendall-Reid on 01252 878722 for further discussion.