Lower Subsidies Lead to Larger Solar Plants

Steve Jurvetson/CC BY 2.0

The legal battles over UK Feed In Tariff (FIT) subsidies for renewables were as bitter as they were damaging to an industry that craves stability and predictability. (What industry doesn't?) At the time, many renewables advocates feared that the first large-scale solar parks that had started to crop up would become the nations' last, but the opposite may actually be true.

BloombergBusinessweek reports that the UK solar industry is sidestepping subsidy cuts, relying on a much lower subsidy that predates the Feed In Tariffs and, strangely, are increasing the size of some of their plants as a result:

“It’s kind of ironic,” Jeremy Leggett, chairman of the London-based installer Solar Century Holdings Ltd., said in an interview in the city. “The government tried to avowedly kill large ground-mounted solar last year and now it’s back.”

Inazin Power Ltd. and Hive Energy Ltd. are among companies proposing plants using Renewable Obligation Certificates first introduced in 2002 and previously only employed in generation such as wind farms. Their use of the incentive program, which gives lower returns compared with the tariffs they used to get, encourages developers to build bigger for economies of scale.

The issue appears to be that Renewable Obligation Certificates (ROCs) favor larger projects by creating credits per-megawatt that utilities are required to purchase to meet their obligations. While only a few years ago, the subsidies were just not enough to justify investment in big solar—the rapid decline of solar prices has meant that these plants now make sense.

And the new breed of plants are an order of magnitude larger than anything built in the UK so far:

"Proposed solar plants are as much as eight times the size of the largest so far built in the U.K. Inazin, formerly Low Carbon Developers Ltd., is seeking approval for a 40-megawatt park at a disused airfield. The U.K.’s Hike Energy plans a 40 million-pound, 25-megawatt site with Moser Baer India Ltd. (MBI)"

Looks like UK solar is far from dead yet.

Tags: Energy | Renewable Energy | Solar Power | United Kingdom