A temperature check for solar power in the UK
While optimism is in the air following recent news that the UK government will relax legislation around the construction of large batteries for renewable energy storage, older industry issues are still ringing out. Yoana Cholteeva rounds up voices from across the UK solar scene to find out how the industry is faring, and what more still needs to be done.
On 14 July 2020, the UK solar industry welcomed a government move to ease planning legislation to construct the powerful batteries needed to store renewable energy. Doing so could unleash the excess of 13.5GW worth of battery storage projects in the pipeline, with 1.3GW ready to build, and 5.7GW with planning permission.
As part of this step, ministers will introduce secondary legislation to remove electricity storage, except pumped hydro, from the Nationally Significant Infrastructure Projects regime in England and Wales.
The decision was met with a positive response as it is expected to simplify the deployment process of flexible large-scale energy storage technologies in the country, help improve the local energy system, and boost operators’ net-zero efforts.
While these amendments are undoubtedly beneficial, the UK Solar Trade Association chief executive, Chris Hewett, acknowledged in a statement that more steps need to be taken to contribute to the industry, such as “providing greater access to flexibility markets, including the capacity market, and applying fairer network charging rules.”
With one key bit of the puzzle now in place, we asked leading UK industry experts if solar is now free to spring forth and prosper and what more needs to be done.
Is the UK solar industry as strong as it could be?
Infrastructure, energy, and renewables lawyer at Gowling WLG law firm
The growth and maturity of the UK solar industry in under a decade, and its contribution to the UK security of supply and net-zero ambitions, is a remarkable and under-reported success story. We await the details, but the possibility of solar accessing the contract for difference scheme is also a very positive signal to the industry.
Director of South Africa-based battery supplier Battery Experts
The UK solar industry is improving. There has been a consistent year-on-year increase in energy produced by solar and, despite demand falling during lockdown, this looks set to increase again.
Although behind Germany and Italy in terms of solar capacity in Europe, the government’s decision to relax planning legislation will no doubt see the UK draw closer to these countries.
The decision will see large storage projects get over the line more quickly and could triple the number of large-scale batteries being produced. This will only encourage investment, which is great for the industry and consumers.
Business development director at solar panel company Mypower
The UK solar industry is not as strong as it could be. There is currently a huge amount of underutilised commercial roof space that would provide clean, low cost energy at point of need for businesses across the UK.
For Mypower, as a commercial solar PV system designer and installer, it is alarming how many commercial rooftops are devoid of clean energy generation technology, and it’s also a poor reflection on legislation that many new commercial and industrial units have only token gesture solar PV installations at best.
Principal consultant at green energy software company Lumenaza
The recent government move to relax planning legislation regarding the construction of the large batteries needed to store renewable energy is certainly positive. It will enable large-scale storage of excess renewable energy that would otherwise get lost and play an increasingly important role in balancing the UK’s electricity system.
Regulatory barriers and a disproportionate cost for local energy and collective self-consumption currently stand in the way of fulfilling the potential of community energy.
Company director at solar consultancy The Little Green Energy Company
Over the last ten years, we have seen solar companies across the spectrum come and go, often driven by various government incentives. I would argue that the UK is currently in the strongest position that it has enjoyed to date and is at an optimal point to drive the solar industry forward.
The market has matured, with established, reputable players able to provide cost-effective solutions both commercially and in the domestic markets as a result of reduced equipment and installation costs. Affordability has helped in wider adoption of the technology, as has the emergence of affordable battery solutions that support in maximising solar output and management.
Now more than ever, we are seeing an urgency attached to renewable energy. Despite the pandemic, electric vehicle demand weathered the storm, boasting positive market share reports for the first half of 2020. The emergence of brands like Tesla has helped to make solar and renewable technology desirable, showing how solar, battery storage, and electric vehicles can offer a lifestyle solution.
What more needs to be done?
Most new developments are not expecting to rely on government support, so from here the key issues for the industry will be consistent, fair, and prompt outcomes when dealing with planning authorities and network operators and, as the technologies are complementary, continued progress unlocking the regulatory hurdles to the deployment of utility scale storage.
The legislation change is a step in the right direction. It seems the next ones would be greater access to capacity markets and to apply some leniency towards network charging rules.
Greater access to capacity markets will make clean energy technology such as solar more competitive against fossil fuel energy. Reducing the capacity threshold for these projects makes it possible for smaller-scale solar projects to participate.
The UK’s network charging rules could also be improved. Embedded benefits for solar projects have been cut, whilst fixed charges have also been added for network users. This will only decrease revenue and growth in the industry.
Clearly, given today’s infrastructure, we would quickly start to see local grid limitations on the sizes of systems that could be installed if every roof was covered. However, this is where storage technology on a local grid level could pave the way for a cleaner, greener future.
There are many actions that need to be taken however. We think that implementing legislation to mandate material localised renewable energy generation for new build commercial and industrial buildings; incentivising renewables or de-incentivising fossil fuels for current buildings, coupled with the aforementioned investment in infrastructure and storage capability would be key first steps.
With regards to the route-to-market for solar and wind power, the government needs to hold more regular auction rounds and lift the capacity cap to maximise development. These actions will help unlock new private investment and generate jobs across the country.
RenewableUK, the UK's leading not-for-profit renewable energy trade association, and the Solar Trade Association estimate that lifting the capacity cap in Contracts for Difference Allocation Round 4 has the potential to generate £2bn of private sector investment and create 1700 new jobs per year in the development and construction of solar power.
Regulatory requirements need to be adjusted, while proportionate charges for electricity produced and consumed locally need to be ensured, for instance by expediting the processing of the Local Electricity Bill.
Whilst the UK solar industry has a solid foundation to build upon, it quite clearly lags behind countries like Germany with regards to deployment and expertise. Growth certainly needs to be encouraged, particularly in the current economic climate, to continue the momentum.
The industry no longer needs government incentives as such, however changes to business rates regulations would make solar and renewable solutions a more attractive commercial decision for business, as would the introduction of tax breaks for those looking to invest in this area.
We’re finding that battery storage is becoming a deciding factor when considering solar PV investment. If battery storage enjoyed the same VAT status as solar PV, we would likely see increased adoption for renewable energy, and within that solar, thus [we can] strengthen the industry.
I believe we have a great platform to work from as an industry, although the focus must remain on continuing to build on this to create a sector that can compete and ultimately replace existing/traditional forms of generation.
This can be achieved by stimulating investment and adoption in solar, thus stimulating the creation of jobs and expertise in the sector. Providing further energy independence, and the opportunity for people to feel that they can make a positive impact in a time of historic global uncertainty, will support maintaining market demand.