PRESS RELEASE: Industry calls on Treasury to deliver #Fair4Solar Budget

Despite being the public’s most popular form of electricity generation, and the largest clean energy market in the world, several barriers remain in existence which limit the uptake of solar in the UK. This year, deployment in solar PV has fallen to an eight-year low, with just 200MW of deployment expected for 2018, representing a 95% fall compared to 2015. This has had serious implications for the industry, with some of the UK’s largest solar companies struggling to maintain an installer base.

This is taking place at a time when urgent action is needed to tackle the looming risk of catastrophic climate change. The recent special report from the Intergovernmental Panel on Climate Change warns that we only have 12 years to avoid breaching 1.5oC of warming, and identified the bulk of the heavy lifting for climate change mitigation will be done by renewables. The report also warned against ‘a lack of regulatory or policy commitment’ which fails to stimulate low-carbon investment, a situation which is abundantly evident for solar power in the UK. [1]

The bulk of the barriers for solar in the UK fall under HM Treasury’s remit. As such, in advance of the forthcoming budget statement on Monday, the STA has made a submission to HM treasury [2], with urgent recommendations to ensure fair treatment for solar PV:

  • All rooftop solar cells and panels, as well as energy storage should be classed as ‘excepted plant and machinery’ under Class 1 Business Rates in the regulations (SI2000/58). This would place solar on a level playing field with gas CHP, which currently benefits from this exception
  • Solar panels and energy storage should be added to the eligibility list for Enhanced Capital Allowances. Solar and storage are currently excluded from this scheme, despite it being targeted specifically at supporting businesses in investing in energy-saving plant or machinery
  • The Climate Change Levy (CCL) price should be set and applied at a level that is effective in accelerating rapid decarbonisation. It is imperative that the CCL is set at a level that is able to facilitate a tangible impact on carbon emissions in the UK
  • Clarify that Power Purchase Agreement (PPA)-contracted solar is exempt from the CCL. In order to support the growth of the PPA market, it is critical that this exemption is clarified
  • Establish a subsidy-free Contract for Difference auction mechanism for mature low carbon technologies, including large scale solar as soon as possible. This is the same auction mechanism currently available to offshore wind
  • All domestic battery storage installations should qualify for a reduced VAT rate of 5% when connected to a solar PV installation. Currently, a reduced VAT rate of 5% is only available to battery storage installations which are installed at the same time as solar PV installations
  • The export tariff for domestic solar must be maintained, as this is a fair market payment for surplus power that does not add to consumer bills and underpins innovation in the nascent smart home market. The Department for Business, Energy and Industrial Strategy recently revealed proposals to end the export tariff, which would deny prosumers fair payment for excess electricity that is provided to the grid, and cause further damage to an industry that is reeling from the looming end of the Feed-in-Tariff in March 2019 [3]

ENDS

Notes to editors:

[1] See our recent press release:  https://www.solar-trade.org.uk/press-release-sta-comments-on-ipcc-special-report-on-1-5c/

[2] The full text of the STA’s Budget Submission is available at: https://www.solar-trade.org.uk/submission-to-hm-treasury-on-budget-2018/

[3] See our #Fair4Solar campaign to retain the export tariff: https://www.solar-trade.org.uk/campaigns/fair4solar/


For further information or to request an interview, please contact:

Name: Leonie Greene
Title: Director of Advocacy & New Markets
Main line: 0203 637 2945


Background on the Solar Trade Association:

The mission of the Solar Trade Association is to empower the UK solar transformation. We are paving the way for solar to deliver the maximum possible share of UK energy by 2030 by enabling a bigger and better solar industry. We represent both solar heat and power, and have a proven track record of winning breakthroughs for solar PV and solar thermal.