As featured in the HVP magazine in January 2013
2013 is going to be the year of renewable energy. According to finance experts, there are more investors interested in funding large-scale solar PV projects than ever before.
In the industry’s early years, development of the UK market was skewed more by government policy than market forces. The way forward for solar energy was seen as the proliferation of thousands of small scale roof or garden installations, funded by ‘retail’ sources of finance.
However, the recent changes to feed in tariffs (FiTS) for solar PV systems have altered the future for renewables in the UK. The Government has reduced FiTS and its cost control framework for solar PV means that for those small operators, like homeowners and SME businesses, planning to erect solar panels on roofs and small plots, the limit of viability has been reached in most parts of the UK.
Biggest challenges in the market
The Government has worked hard to encourage green energy initiatives but sadly the Road Map it’s set out for achieving 30 per cent green energy by 2020 is already out of date. A heavy focus on offshore wind has meant other energy sources are not being given due consideration.
Unfortunately, public opinion is still a major stumbling block for green energy. We want green energy in principle but we don’t want our roofs covered with solar panels, wind turbines outside our windows or the smell of biomass in transit. More education is needed to encourage the public to embrace green energy solutions.
However, research evidence suggests that there is demand for long-term investment in large-scale, mainstream PV solar power schemes, where the return is based on producing sustainable, renewable energy specifically for sale to the grid. Installers focusing on FiTs alone may be missing out on other project opportunities.
ROCs – the biggest opportunities in the sector
One alternative is Renewable Obligation Certificate (ROC) financing. Projects over 5MW are ineligible for FiT payments but will receive incentive payments under the Renewable Obligation Certificate.
ROCs are green certificates issued to operators of accredited renewable generating stations for the eligible renewable electricity they generate. The ROCs place the onus on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources, so they are funded by the energy suppliers themselves and not the Government.
So, while the Government’s FiTs have been cut, there is no capacity limit for systems funded under ROCs. According to The British Photovoltaic Association (BPVA),the UK solar industry has reached an important and exciting stage in its development and has the opportunity, for the first time, to be the cornerstone of the government’s onshore renewable policy.
Where suppliers don’t have a sufficient number of ROCs to meet their obligation, they are required to pay an equivalent amount into a ‘buy-out’ fund. The administration cost of the scheme is recovered from the fund and the rest is distributed back to suppliers in proportion to the number of ROCs they produced in respect of their individual obligation.
ROCs produce their best savings on major energy plants producing 5MWp or more. As the cost of producing solar power has reduced significantly over the past few years, suppliers are no longer just looking at solar plants of just 30 acres – they are looking at sites of 300 acres or more.
This opportunity is also due to two other factors: significant cost reductions in the price of both solar modules and, importantly, improved installation techniques. In light of these developments solar has the potential, using lower subsidies, to see to a significant increase in installed capacity over the coming years and to be a major part of the government’s 2020 renewable electricity target.
The 22GW target set and confirmed by the Government has the potential to transform the UK market in one of the most interesting energy markets in Europe over the next few years.
In the past, traditional, relatively expensive, time-consuming and environmentally damaging methods have often been used to install the frameworks to which solar panels are attached.
Innovation in foundation systems has meant this is no longer the case; take the German-engineered Groundscrew® system for example. Groundscrew® is a robust and sustainable alternative to traditional concrete foundations for ground mounted solar panels. The system removes the need for excavation and concreting. Where you would usually cast small concrete pads, Groundscrew® can be used instead.
Groundscrew® foundations are light in weight and easy to transport to the site. They have proved highly effective: sufficiently flexible to survive high wind loads and work in extremes of temperature or adverse chemical, biological and geological conditions, with the advantages of rapid installation and minimal maintenance.
JPCS pioneered the installation for ground-mounted solar panels using Groundscrew® and is now the UK’s largest specialist ground mounted solar PV installer.
JPCS has completed numerous green projects throughout the UK. These include the installation of comparatively small photovoltaic solar array projects, right through to some of the UK’s largest commercial solar PV ‘farms’. Since entering the solar market, the firm has completed more than 20MWp of solar PV installations using this innovative Groundscrew® foundation, with a further 30MWp currently under construction, including the UK’s largest solar farm, at 10MWp, in Hampshire.
The big green future
Despite the challenges which lie ahead, the future for ground mounted solar mounted PV is bright. Great return on investments is there for those who have the green vision to develop large scale solar PV projects.