A response from a community-based solar developer to the consultation on changes to financial

support for solar PV

Dear Sir/Madam,

I represent a community-level organization called Solar Goaler that advocates for and develops small-
scale solar energy projects. Our members number around 25 and hail from the local community of
Bevan Place in Cardiff, Wales. For the past nine years, we have been engaged in using various means of
harnessing solar radiation, such as through solar heaters as well as photovoltaic panels.

We considerably appreciate the concern that the government is showing towards the electricity
consumers risking having to pay higher electricity bills in the context of the Renewables Obligation (RO).
The market for solar PV solar power is indeed growing in the UK. Industry watchdog entities such as
Solarbuzz have assessed that the level of new installed solar PV in 2014 has already risen above 2GW by
the end of October and is expected to cross 7GW by the end of March 2015 (Colville 2014). In
retrospect, it is also interesting to note that the UK solar PV market started to grow noticeably only since
2011. After adding 1.5 GW of solar capacity in 2013 (EPIA 2013), which was more than that of Italy, it is
set to add more than three times that much by the end of this year. So, we definitely agree with the
projections of the Department and the government with regards to question 1 on page 17. In fact it
would appear that the projected capacity level for the end of 2017 of 5GW as stated in para 19 on page
8 will quite possibly be reached two years earlier.

Surely, it is quite presumable that as burgeoning electricity suppliers purchase an increasing number of
Renewables Obligation Certificates (ROCs), they would transfer the burden to the consumers through
related levies. Closing the RO by 1st April 2015 for new PV commercial projects with a installation
capacity above 5MW, as proposed in para 21 on page 9 of the consultation document, may apparently
seem to be a step in the right direction.

However, we are apprehensive that following the RO closure and the implementation of the Contracts
for Difference (CfD) auctioning process, commercial entities might resort to posing as 'community
organizations.' This situation might arise, since the existing definition of community organizations for
sub 5MW FITs scheme is being considered to be retained for the proposed 5MW to 10 MW band in the
consultation for the Support for community energy projects under the feed-in-tariffs scheme (DECC 2014,
paras 4.12-4.13). For-profit companies could also form loose joint ventures (JVs) or partial ownership
based on separate commercial owned units and benefit from the existing FIT rules (DECC 2014, Para
1.12).

An additional concern is that the effectiveness of the Levy Control Framework (LCF) itself was brought
into question. The National Audit Office's 2013 report highlights the drawbacks in the rationale behind
the LCF that determines which levies are to be governed under it (NAO 2013, Para 2.2 p. 18). It further
asserts that though "Energy suppliers are responsible for the full costs of meeting their obligations but
the Department (DECC) recognises that costs are passed on to consumer energy bills," which is
estimated to be £1.3 billion (NAO 2013, P. 19). Therefore, while agreeing to question three in the
consultation's on page 17, we disagree with question two. We do so with the assertion that the DECC as
well as the HM Treasury develop a more robust Levy Control Framework for it to fully achieve its
objectives: that of safeguarding consumer interests and supporting genuine community-based
renewable energy projects of 5 MW and below that fall under the FIT scheme.

The essence of our community organization Solar Goalers is to promote the development of freely
available solar energy through photovoltaics. Hence we would not be keen on having any caps being
applied within the RO on the supply or the capacity of large-scale solar PV above 5MW, which would
hamper the promising growth of solar PV on the whole. Therefore, we are in accordance with the
proposals referred to in question six. Three-fourths of all PV solar in UK is ground mounted and most of
it is in the form of large-scale projects over 5MWs (Colville, 2014). Thus, the continued trend of the
growth of over 5MW solar PV would not interfere with the development of community-based solar PV
ventures that are mostly rooftop based and provide electricity directly to a building. As is, the limitations
of UK's aging grid will serve as a constraint on the transfer of electric power from large solar farms into
the main supply lines (McGrath 2013).

As for question seven regarding the review of banding levels, we would be inclined to disagree with the
proposal of not undertaking it. We feel that it is in fact imperative that the DECC and the government
carry out a banding review at this stage. The band levels in effect now were set in December 2012. Just a
year later, it was reported by the Solar Trade Association (STA) that solar power suppliers were actually
getting 10 percent higher subsidies from the government than what they had initially asked for. They
expressed concern that such subsidies promised for solar farms being set up from 2016 to 2019 would
burden the consumers with excessive levies in their electricity bills (Gosden 2013). Such a scenario will
emerge despite the ROC per MWh for ground mounted solar PV decreasing from 1.3 in 2015/16 to 1.2 in
2016/2017 (DECC 2012). Consequently, though we agree with the crux of question eight, we do so with
the reservation that the 'grandfathering' policy can only be effective, especially with regards to the
vulnerabilities in the LCF, if the banding levels were adjusted to reflect the original subsidies.

I conclude this response by reaffirming our position on the combined importance of the RO for sub-
5MW and over 5MW projects for spurring the contribution of solar power in UK's electricity mix.

References

Colville, F. 2014. Exclusive: 2014 UK solar deployment hits 2GW [Online]. Available at:
http://www.solarpowerportal.co.uk/guest_blog/exclusive_2014_uk_solar_deployment_hits_2gw
[Accessed: 25 November 2014]

Department of Energy and Climate Change (DECC). 2012. Renewables Obligation banding levels: 2013-17
[Online]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/
file/211292/ro_banding_levels_2013_17.pdf [Accessed 24 November 2014]

Department of Energy and Climate Change (DECC). 2014 . Support for community energy projects under
the feed-in-tariffs scheme. Part B: increasing the maximum specified capacity ceiling for community
projects from 5MW to 10MW [Online]. Available at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310413/Part_B_-
_Increasing_FITs_ceiling_from_5MW_to_10MW.pdf [Accessed: 23 Nov 2014]

European Photovoltaic Industry Association (EPIA). 2014. Global Market outlook for Photovoltaics 2014 -
2018. Available at:
http://www.epia.org/fileadmin/user_upload/Publications/EPIA_Global_Market_Outlook_for_Photovolt
aics_2014-2018_-_Medium_Res.pdf [Accessed: 24 November 2014]

Gosden, E. 2013. Consumers to pay 10 per cent too much for solar farms as subsidies 'too high' [Online].
Available at: http://www.telegraph.co.uk/earth/energy/solarpower/10495136/Consumers-to-pay-10-
per-cent-too-much-for-solar-farms-as-subsidies-too-high.html [Accessed: 25 November 2014]

McGrath, M. 2013. Grid capacity worries spark UK solar farm boom [Online]. Available at:
http://www.bbc.co.uk/news/science-environment-24659790

National Audit Office (NAO), the Comptroller and Auditor General. 2013. The Levy Control Framework
[Online]. Available at: http://www.nao.org.uk/wp-content/uploads/2013/11/10303-001-Levy-Control-
Framework.pdf [Accessed: 23 Nov 2014]