Government puts the solar revolution on hold
Whilst the good news about the reduced cost of solar panels is making solar technology more accessible to homeowners, the Government’s decision to end most subsidies for large-scale solar is a real blow to the industry.
Government cuts to be implemented by the end of March
The mass market created by subsidies in many countries has seen the cost of solar panels reduce by as much as 70% in the last few years, which is a good thing. However, this has caused the Government to revise its forecast for solar energy use and implement cuts at the end of March.
Leonie Greene of the Solar Trade Association believes these cuts are a mistake, “We need subsidies for another few years – maybe five – before we can compete with fossil fuels in the UK. Only 35% of the cost of solar is the price of the panels – the majority cost is the installation and that will only come down if we have a large and thriving competitive industry in the UK. The government’s decision to pull out subsidies is an own goal – it will delay the moment when solar can compete with fossil fuels.”
However, Energy Secretary, Ed Davey disagrees saying that renewable energy companies are already able to compete judging by the recent Contracts for Difference results – Results for UK’s first auction for Contracts for Difference, where solar companies provided two of the lowest bids.
Energy Secretary positive about future solar capacity
Ed Davey told the BBC he was “amazed and delighted” by the reduced costs of solar power and believes that “Solar power will do to energy what mobile phones did for communication and markets.”
According to the BBC, ‘He said he expected up to 14GW of solar by 2020 – up from 5GW at the end of 2014. That equates roughly to 1.5% of total UK annual electricity to just under 4%. He said he expected it to grow further in the next decade.’
However, Leonie Greene is disappointed with Ed Davey’s forecast and commented, “Previously the minister Greg Barker expressed an ambition to get 20GW of solar by 2020 – we could have hit that figure if the government wasn’t so blind to solar’s potential.”
The race is on for UK solar companies
As a result of the proposed Government cuts, companies are racing to connect to the grid before the end of March. This temporary solar surge has resulted in as much new capacity being installed in the first three months of 2015 as in the whole of 2014, according to the Solar Trade Association. However, they predict solar installations will fall by 80% after this period as most companies won’t be able to compete.
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