A group of organisations, including Community Energy England, Greenpeace, the WWF and more, recently published a statement urging the UK Government to adopt ambitious targets for solar energy in order to meet its Net Zero Strategy. It is always welcome to see organisations making the case for solar PV and, in this article, I will look at the three key recommendations it makes and assess the potential they may have. I will also touch on the suggestions for the residential sector and explain why this market should absolutely not be overlooked.
Firstly, the statement proposes classing onsite generation and storage assets like solar PV and Battery Storage as ‘excepted plant and machinery’ under Class 1 in business rates regulations. This would make it more attractive for commercial property owners to generate power using a grid-tied solar PV system exempting the value of the machinery used to do so from business rates valuation, a powerful and cost-effective way to promote more solar PV generation for the National Grid.
Secondly, the statement proposes extending the 31% Energy Efficiency Improvement for new build homes, announced by the government just over a year ago, to non-domestic properties. This would be a welcome measure. An estimated 74% of the carbon emissions of London alone come from buildings and the technology already exists to achieve this reduction, including solar PV, air source heat pumps and modern insulation. There would also be a considerable benefit to businesses in the form of reduced overheads from utility bills.
Thirdly, it suggests extending the Public Sector Decarbonisation Scheme until the end of the parliament and imposing a target of 100% renewable energy use by 2030. This would make a huge difference from an environmental standpoint. Central Government alone occupies nearly 3 million m2 of office space, 4 million m2 in its prison estate and nearly 27 million m2 in its hospitals. Add in schools and local authorities and this is a truly enormous property portfolio, much of which is in long term occupation and therefore a prime candidate for renewable energy systems like Solar PV which have payback periods of between 5-10 years.
Additionally, the statement has a variety of suggestions for residential properties, including extending the means-tested element of the Green Homes Grant to cover solar PV and energy storage, zero-rating (VAT) these technologies, providing capital support through the new National Infrastructure Bank for 0% interest loans for green technology and supporting community energy programmes, for example through an (export) feed-in tariff – as is common across mainland Europe.
Current export tariffs are of the order of 5.5 p/kWh whilst costs to import electricity are nearer 15p/kWh. By bringing the feed-in-tariff closer to the cost of imported electricity, consumers will be incentivised to install solar PV without the need for government to have a feed in tariff based around generation. By only paying consumers for what they export to the grid, electricity supply companies are paying consumers a fair price for the onsite microgeneration exported back onto their grids.
We agree that getting widespread solar PV adoption across the UK is critical to reducing energy emissions and achieving energy sustainability. According to the Office of National Statistics, smaller installations under 4kWp account for 93% of installations by number, generating 21% of total electricity output. Whilst residential Solar PV is already an attractive proposition for consumers, additional incentives would go a long way towards driving the next level of adoption. The feed-in tariff between 2010-2019 was an especially popular incentive, with nearly 100,000 installations under this tariff in Q1 of 2012 alone.
In conclusion, the measures set out in this statement, taken together, would create a powerful engine for the growth of renewables over the next few decades, driving a reduction in emissions and helping to create new jobs for the government’s planned post-COVID green recovery.