What next for the UK Residential Solar Market?

After a year of breaking records including the delivery of the highest weekly output, the solar industry was delivered a blow after the government announced an end to feed-in-tariffs for new applicants from April 2019. 

Supporters of the feed-in tariff scheme view the program as a great opportunity for people to contribute and play their own part in the transformation of the energy industry. Since its inception back in 2010, the tariff has encouraged a surge within the solar market, resulting in the addition of solar panels to nearly a million households across the UK.

The tariff enables participants to receive a set amount for every unit of energy generated, commonly referred to as the ‘generation tariff’. The rate fluctuates depending on panel size, installation date and how efficient the property is. One of the key appealing features for customers interested in solar was the ‘export tariff’ which meant any additional units of electricity could be sold back to the supplier, at a rate of 4.85p per unit. These incentives were reduced dramatically back in 2016 which resulted in the number of people installing solar panels on their household to decline considerably.

The trade organisation for the renewables industry, RenewableUK, has openly criticised the Government’s decision to halt the tariffs. Emma Pinchbeck, the executive director for RenewableUK explains that the confirmation that no replacement will be formed for the Feed-in Tariff is a significant blow to small-scale renewables across the UK. Pinchbeck emphasises that small-scale projects are an essential part of developing local, smart power energy systems that are vital to the future of UK energy systems.

RenewableUK explains that many companies within the renewables industry have assisted many homes and businesses in reducing their energy costs, and contributed to expanded renewables into a major industry with worldwide exports.

Solar has proven to be a popular market for households, requiring little maintenance and creating a level of security under standard warranties for periods of up to 25 years. According to the Energy Saving Trust, properties with solar panels are generally easier to sell and generate average household savings of approximately £150 every year. Furthermore, installation costs have continued to decrease, improving the appeal of the solar market.

The end to the feed-in tariff is expected, however, to put a halt to take up from middle lower-income families. Local councils in the south west of UK have said the government continues to shift the goalposts concerning renewables, impacting housing and energy policies and ultimately delay any plans to add solar to their housing schemes.

Regen SW, who promote green energy within the South West recently stated that the poorest in society will be affected the most by the end to the feed-in-tariffs, explaining that by reducing the support and financial appeal, there is a danger that the industry will revert back to only being affordable and accessible to the more wealthy.

Lessons to be learned from California.

In contrast, crossing the Atlantic the region of California made announcements that all new homes within the state would be constructed with solar panels. The new plans will officially come into play in 2020 and form part of the states efforts to reduce their greenhouse gas emissions. Solar industry professionals within the UK are hoping that the UK Government will take note and learn from the progressive steps being made in California.

Regionally based business Sunrun has confirmed its plans to expand its solar offering to low and moderate income housing. Sunrun intends to develop a minimum of 100 MW of solar energy for affordable multi family dwelling. Sunruns plans, once complete, will benefit in excess of 50,000 moderate and low income homeowners. All installations will be completed at no cost to the tenants and generate a range of economic benefits and reduced costs for renters. The new initiative will also support improvements to local air quality and the reliance on conventional fuels for energy generation.

Lynn Jurich, the co-founder and CEO of Sunrun explains that the business is primarily aimed to ensure solar energy is accessible to everyone. Jurich states that by providing affordable solar energy to residents in low and moderate income properties will enable them to support communities that tend to be hit the hardest by the impacts of pollution and climate change. The plans further reiterate the developments in California and the role home solar can play in improving people’s livelihoods, creating a clean environment and a more robust energy system.

New legislation in California including affordable housing solar roof projects has provided the support for businesses like Sunrun to expand their offerings in the solar market. To this date, nearly 40 MW of solar energy has been installed on affordable multi-family properties directly through the California Public Utilities Commission’s Multifamily Affordable Solar Housing (MASH) program. This program is now being replaced by the Solar on Multifamily Affordable Housing (SOMAH) program. Sunrun is committed to providing nearly a third of the programs goal of delivering 300 MW of solar energy for affordable housing by 2030.

The SOMAH program was created to enable families from low incomes and disadvantaged communities to be capable of harnessing the benefits of the surging solar market in California. As Bernadette Del Chiaro, the Executive Director of California Solar & Storage Association simply puts, no one actually owns the sun. Whether you are rich or poor, we all should have access to the sun’s clean and affordable energy to power our lives.

Household solar schemes are providing people with more control over their energy usage. The development of further residential solar schemes is enabling the state to create a more sustainable and efficient energy system

What does the subsidy loss mean to the UK solar market?

Meanwhile, the UK solar market is facing a period of uncertainty due to recent subsidy changes. Some industry members, however, believe that there are a series of new projects developing that prove the solar market is capable of progressing without the support of subsidies. Some analysts believe that the scrapping of subsidies may in fact be a positive thing for the UK solar industry.

A recent report by the Solar Trade Association (STA) indicates that local authorities are capable of developing solar projects without the support of subsidies. For example, West Sussex County Council are developing a subsidy-free project located on a disused landfill site, and other regional councils are following in the same path. The STA indicate that the top 10 local authorities measured by investment levels have invested over £80 million into the solar market collectively.

The report by the STA explains that councils can ensure solar is a success by implementing planning powers, making use of interest free finance options and integrating solar and storage with electric vehicle infrastructure.

Barnsley Council gained a lot of media attention in recent years after developing its own low carbon energy business, Energise Barnsley back in 2015. The company has now developed into the largest rooftop solar community project within the UK, in an area regarded for high levels of deprivation and fuel poverty.

Some energy experts are questioning whether the loss of subsidies will mean a more sustainable solar market for the future. Technological innovation has created new and efficient solar products, that are more efficient and cost effective. Cambridge based business Polysolar have designed a transparent film which they believe utilise the power of approximately 1 billion windows across the UK. Hamish Watson, the CEO of Polysolar believe the end of the feed-in-tariff will actually drive more innovation and development within the market, citing that the biggest challenge facing solar was Government policy.

Watson explains that feed-in tariffs introduced many people to solar but was largely focused on creating financial returns via the cheapest possible option. As subsidies have decreased, Watson believes more focus should be placed on creating innovative, efficient and cost effective solar projects for future development.