Greater deployment of solar and other renewables on commercial buildings is crucial to the technology’s hopes of achieving grid-parity after subsidy cuts and other government interventions significantly impacted their growth path, a new report has found.
The Renewable Energy Association’s annual REView report, produced in conjunction with KPMG and Innovas, claimed that while solar PV had defied expectations in terms of its deployment it faced an uncertain future following the UK government’s reset of renewables subsidies.
The report also stated that this much was true of renewables across the board, warning that the “sudden and severe” cuts threatened to slow the industry’s progress and limit decarbonisation.
KPMG echoed those sentiments, stressing in an investment review that the industry was “in transition” following a year which saw more than 20 renewable energy support frameworks either cut or abolished.
The feed-in tariff for small-scale renewables has been significantly limited and the renewable heat incentive is due to be completely overhauled as part of a cost-cutting exercise to protect spending under the Levy Control Framework.
Nina Skorupska CBE, chief executive at the REA, said that UK renewables had been “blindsided” by the cuts. “While many businesses have been left reeling and deployment has begun to slow, as an industry we will persevere, we will innovate, and we will continue to grow,” she said.
Solar in particular is facing a crucial crossroads as it narrows in on grid-parity, the time at which the technology becomes as cheap to deploy as gas. While PV has reached that level in other countries across the world, industry estimates placed it at three or four years away from that maturity in the UK.
However subsidy cuts have placed that development at risk, with average installation costs having dramatically increased since the new feed-in tariff regime was introduced at the start of the year.
The UK market has typically been dominated by domestic installations, with utility-scale projects enjoying periods of concentrated deployment under the RO. Commercial-scale rooftops have struggled to live up to expectations historically, however the 50kW+ FiT band remains one of the most active under the new regime. It is this band of installs that report argues is crucial to the sector transitioning to a subsidy-free future.
“In order for solar PV to become attractive without subsidies there is a need to unlock deployment on buildings in the commercial sector,” the report reads.