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05th August 2015 | Solar PV Industry Comment - Author: Chris Sutor

There could be a rocky road ahead in UK Solar.  

Recently there’s been some talk of “hyper-digression” in the 250-5MW sector, with solar farms being pulled down to the 5MW level to benefit from FITs. Many of the “big boys” have been burnt whilst those concentrating on the rooftop and distributed market continued to build their businesses – making a great job of it too.  

But all may be set for change…  

There has been talk of wide-ranging changes to the FIT mechanism (check out Amber Rudd’s comments in the general press).  News of £1Bn investment plans by just two groups of many into free solar in social housing will no doubt fuel the debate as to the wider value of FITs and may bring forward changes. 

One of the benefits of FITs is that it leaves money in the local economy to allow further economic growth. Siphoning this off to overseas investment organisations doesn’t meet with this objective in quite the same way…  Although there are still huge benefits from reduced energy usage that shouldn’t be ignored.

And if you thought that hyper-digression was something confined to the field-scale solar market then think again. With £1Bn being just part of the market investment being considered by some financiers, the installation rate could rocket over the next few quarters. 3.5% could achieve 7% or more reductions quarter on quarter.

This brings us back to the rocky road.  But perhaps it won’t all be rocky.  

If Amber Rudd makes the correct changes, she could support the independent UK solar sector, whilst still leaving room for a sizable but not all consuming financed sector.  Whatever she does, she’s got a difficult job to ensure that FIT budgets aren’t exceeded, that Fuel Poverty is alleviated, and that a thriving UK solar sector maintains its refound confidence.

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