• EMEA

Is the Sun Still Shining for Solar PV?

By John Laval , Associate, EMEA Energy, Infrastructure & Sustainability

Solar PV  is now well-established as a source of renewable power for businesses and homes across the UK. The current installed capacity is just over 13 Gigawatts (GW) behind only Germany (49 GW) and Italy (23 GW) in Europe and seventh globally. UK solar PV output between June 21 and June 28 of this year was around 533 gigawatt-hours of energy, causing it to overtake gas as the number-one energy source in the country during that period. Moreover, the recent National Grid Future Energy Scenarios report suggests that solar PV could provide 33GW of power by 2030 and 66.2GW by 2050, making it a leading source of renewable power.

Not bad for a country with average sunshine hours similar to those of Scandinavia.

Feed-in Tariffs

The rapid growth of solar in the UK primarily between 2010 and 2015 has been unambiguously driven by the Feed-in Tariff (FiT) subsidy scheme for small-medium renewable energy projects (<5 MW). FiTs were slashed in 2016 and, as expected (though not necessarily planned for), the government aims to end the scheme on 31st March 2019. Somewhat unexpectedly, there are plans to remove the export tariff (paid by energy suppliers for ‘unused’ power exported to the grid) too – the export tariff being the only ‘route to market’ for excess power generated in many cases. What, if anything, will replace it has yet to be made clear.

So where does this leave solar PV in 2019 and beyond?

Well, solar PV has a useful habit of surviving and thriving through darker times (it does produce even on cloudy days!). Its strong growth in recent years coupled with over-production of equipment by some manufacturers globally have helped drive down costs (by c.60% since 2010 in the UK ). Bloomberg New Energy Finance’s New Energy Outlook 2018 report suggests average costs will fall by around 70% by 2050 globally compared to 2017/18 prices. This has helped solar PV remain commercially viable in the context of dramatic and poorly-managed subsidy reductions and a volatile policy regime (hence the oft-used industry term ‘solarcoaster’). In fact, the UK’s first truly subsidy-free (large-scale) PV projects will be operational in 2019.

New Technology

Though perhaps solar PV’s greatest strengths are its relative simplicity and adaptability as a technology particularly within the domestic and commercial property sectors. Its capacity to suit a range of building and energy requirements in urban and rural locations is now proven. Moreover, solar is now integrating with complimentary technologies such as battery storage and electric vehicle charging – both technologies with strong growth projections in the UK – , if, like solar, somewhat lacking in robust policy support currently. These combined technologies enable more flexible patterns of power consumption and delivery; helping to drive greater value from each kWh of solar energy generated, potentially reducing pressure on local and national power networks and negating the requirement for an external ‘route to market’.

In the context of a rapidly evolving yet uncertain and volatile energy landscape it is these attributes that will help solar PV continue to survive and thrive in the UK. Even though the sun doesn’t always shine.

 

John Laval  is an Associate in the EMEA Energy, Infrastructure & Sustainability team

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