It is quite undeniable that the UK has experienced a huge solar boom in the last two years. After its government established the Feed-in Tariffs (FiTs) in 2010, the industry essentially went from nothing to 2.5GW and there is no end in sight. The UK government is striving to reach a goal of 20GW by 2020. Currently, 1.9GW of UK’s installed solar capacity is roof-mounted and 0.6GW of its capacity is from ground-mounted modules or solar farms. The majority of the UK’s solar capacity is located in the South West with over 70 solar farms totaling 290MW. However, the government decreased the FiTs soon after realising the extent of interest from relevant players. Some have even gone to criticise the lowered FiTs as an example of unsustainable state assistance. FiTs are no longer available to large-scale projects, however, they remain quite economically feasible under the Renewable Obligation (RO) scheme, and with lower solar module costs and cheaper panels from China. While the RO has been successful, the Renewable Obligation Certificates (ROCs) were lowered from two to 1.6 in March. Nevertheless, the market may begin to shift for the UK in June as the European Commission is set to impose import tariffs on Chinese solar modules.
UK's solar industry must now deal with EU's import tariffs on Chinese solar modules iStockphoto.com©stockcam
In attempts to mitigate what some European solar panel manufacturers have perceived as a take-over by the Chinese industry, the EU will place anti-dumping tariffs of up to 67% on panels from China. China currently exports 21€ billion worth of solar panels to the EU every year, totaling 80% solar panel sales in the EU. Some European solar manufacturers that have filed for bankruptcy have complained that Chinese manufacturers have received unfair assistance from their government such as tax rebates, free land for factories, and other policy support. Regardless of the cheaper prices, some consumers worry that the quality of solar panels coming from China is not on par with European manufacturers. Despite China’s “unfair competition”, hundreds of companies have written to the European Commission, warning of the consequences that will come with the tariffs, making solar less attractive to investors and consumers and the possibility of increasing technology costs.
Ray Noble, one of the principals behind UK’s recently opened national solar centre sees potential in Europe and UK firms downstream of solar panel manufacturing – in installations and development of new technologies. To have a thriving domestic industry is better than none at all and the UK can begin to focus on areas of the industry where they can lead the world. Eventually, technology costs will drop and subsidies may no longer exist, perhaps, solar energy will finally be feasible on its own. The UK should also further investigate the incorporation of energy storage technologies with PV energy which has already been implemented in Germany and Japan. It provides an opportunity for UK engineering firms and a possibility for the UK to have inverters and other support structures produced only within the UK.
Currently, the UK consistently outperforms the predictions made on its industry and investors receive higher returns than is originally expected (up to 15-20% better than computer predictions). It seems like the biggest issue in with UK’s booming solar market is trying to keep up with it.
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