The U.K. feed-in tariff was a long time coming, but after a year of operation and observation of government reaction to it, the policy, and microgeneration more broadly, it can be seen for what it is: a dynamic, yet peripheral, program. It is not seen as the younger sibling of large-scale generation, but rather as a distant cousin. The pity is that the U.K. FIT has unleashed such enthusiasm and such pent-up demand, especially in the residential PV space, that it could go a very long way if the government were truly committed.
The government undertook an assessment of the U.K.'s competitive advantage on renewables and singled out certain technologies to support in order to maximize economic and industrial benefits for the nation. The targets are largely offshore wind and marine (wave and tidal), with some R&D being done on PV. The U.K. solar market has skyrocketed despite the lack of support that the government has given other renewables.
Job growth in the PV space has exploded and is expected to continue, although the recently proposed cuts to the feed-in tariffs that are paid to larger-scale PV installations will take some time to digest for all concerned. Expansion so far has been overwhelmingly in the domestic sector, and this is unaffected by the new tariff revisions. Whether domestic rates will still be in place at the end of this year’s government review period remains to be seen. The number of MCS-certified installers ballooned under the FIT, growing from around 600 to over 1,800 in ten months. Two-thirds of these are in the PV space. A total of 17,500 solar jobs are expected to be created in the U.K. by the end of 2011.
Uncertainty still surrounds the U.K. FIT rates because the scheme was designed for domestic, community, and small business use, not for large institutional investors. This makes more sense when one places it in the context of the major national energy investments, which will almost certainly be going the way of nuclear and CCS under the current government’s guidance. The Conservatives, and the Labour government before them, are both ardent nuclear supporters. The Liberal Democrats, now in coalition with the Conservatives, have very little say in the matter.
It is evident that the current 25GW energy gap is focusing the minds of government figures more than any other issue. In the next decade, the U.K. will lose eight nuclear and six coal-fired power stations as the facilities reach the end of their useful lives. Minimizing costs to the taxpayer and the exchequer at a time of deep budget cuts is a priority. Therefore, enticing investments from foreign companies is one way forward, although costs will ultimately be passed along to energy consumers. Though renewable generation brought online by the FIT may not close the massive energy gap, it does promise job growth in all corners of the country and the results thus far have been very promising... Subscribe to PVNews to continue reading!
Source: Solar Power Portal UK, GTM Research
Also featured in the April issue of PVNews:
- An excerpt from the SEIA/GTM Research US Solar Market Insight report highlighting the downstream domestic market in 2010
- A comprehensive industry news digest
- PVNews Feed-in Tariff tracker, large-scale project announcements tracker, utility PV pipeline and the newly introduced PV supply sales agreement tracker.
Analysis of the U.K. FIT with regard to other renewable energy generation is available in "The UK Feed-in Tariff: A User Survey" by Miguel Mendonça.