- 1 Overview of PV Market in United Kingdom
- 2 UK Solar Energy in 2018
- 3 UK Policy and Regulations for Renewable Energy
- 4 UK targets by 2020
- 5 Contract for Difference (CfD) in Energy Markets
- 6 Feed In Tariff Policy
- 7 Renewable Heat Incentives in the UK
- 8 Free Solar Panel Initiatives From the UK Government
Overview of PV Market in United Kingdom
Solar Energy is the most popular renewable energy source worldwide. Based on 2015 global report, United Kingdom is considered the fourth country in the solar energy capacity. United Kingdom has achieved great milestones in the solar energy sector with 12% of renewable electricity capacity and 2.9% of renewable electricity generation. Solar PV installations have risen by 70% between July 2012 and July 2013 to reach total installed power of 2.4 GW in 2013 between 1.7 GW as small domestic scale under the Feed in Tariff Policy and 0.2 GW as large scale (UK Renewable Energy Roadmap Update, 2013).
The United Kingdom has been contributed as one of the top ten countries in the solar energy by adding 2.4 GW of solar PV capacity in 2014 and 3.7 GW in 2015 to reach 9.1 GW power capacities by the end of 2015. Solar energy has boomed its exposure in the United Kingdom as a domestic source of energy as more than 125,000 of UK households have installed solar panels on their rooftops. Solar energy has increased significantly by 30% from 2.7 TWH in the third quarter of 2015 to reach 3.5 TWH in the third quarter of 2016. Solar energy can be the optimum solution not only to achieve the 15% of 2020 plan, but also to achieve the 26-32% of carbon emissions reduction plan as the households are responsible for 27% of carbon emission of The United Kingdom. Installing solar systems on each household rooftop will ease the burden of carbon emissions reduction (Renewables 2016 Global Status Report, 2016)
Solar energy is one of the key renewable energy sources that can create the balance of the energy mix in The United Kingdom as it is versatile and scalable for a wide range of locations including domestic and commercial buildings. In addition, PV technologies have achieved higher efficiency and lower costs in short time. The government has also encouraged the solar energy investment through the Feed in Tariff policy that has attracted many investors to go in the solar business. Solar energy capacity is expected to reach 20 GW installed power with electricity generation of 18 TWH by 2020 (UK Renewable Energy Roadmap, 2013).
UK Solar Energy in 2018
Provisionally, at of the end of July 2018 overall UK solar PV capacity stood at 12,885.9 MW across 956,671 installations. This is an increase of 1.6% (207.9 MW) compared to July 2017. In July 2018, at this point, 10.16 MW (2,761 installations) of solar PV capacity is confirmed as having been deployed throughout the month. Figures for March 2017 now show 649 MW installed during the month, with 71% from 50 kW to ≤ 5 MW sized installations (mainly those qualifying for a grace period), ahead of the final closure of the RO to solar on 31 March 2017. This figure may be revised further. The cumulative capacity figures presented last month for previous months in 2017 were revised this month. To date, 45% (5,824 MW) of total installed solar PV capacity comes from large scale installations greater than 5 MW, with 20% (2,567.9 MW) coming from small scale 0 to 4 kW installations. At the end of June 2018 (end Quarter 2), 60% of capacity (7,504 MW) came from ground-mounted or standalone solar installations. This includes the two operational solar farms to be accredited for Contracts for Differences (Charity and Triangle solar farms). Within the last three years, the largest increase in capacity occurred in March 2016 (1,227 MW), just before the RO was closed to (non grace period) 50 kW to ≤ 5 MW installations and before the final closure of the RO to grace period > 5 MW sites. Of the increase in capacity seen that month, 53% (647 MW) was seen in > 5 MW installations.
During the last decade of solar energy in United Kingdom, LG and Panasonic make some of the best solar panels on the market because of their industry-leading 25-year product warranty, high module efficiency of up to 21.1% and affordable price.
UK Policy and Regulations for Renewable Energy
Under the EU Directive 2009/28/EC, member countries of the European Union were obliged to draft, and submit to the European Commission, National Renewable Action Plans (NREAPs) outlining pathways that will allow them to meet their 2020 renewable energy targets.
UK targets by 2020
- 15% share of energy generated from renewable sources in gross final energy consumption;
- 12% of heat consumption met by renewable sources;
- 31% of electricity demand met by electricity generated from renewable energy sources;
- 10% of energy demand met by renewable energy sources.The UK renewables policy framework relies on three main components:
- Financial support for renewables;
- Removing barriers (administrative, policy uncertainty, etc.);
- Supporting and developing emerging technologies; Measures that will allow UK toachieve its targets:
- Continuation of the Renewables Obligation (RO)
- System of feed-in tariffs
- Introduction of Renewable Heat Incentive (RHI)
- Cooperation with the European Investment Bank (EIB) and the Green Investment Bankfor funding provision for renewable projects
- Support to R&D in the sectors of renewable energy technologies and energy efficiency
- Continuation of financial schemes providing support to various technologies in different sectors
Contract for Difference (CfD) in Energy Markets
Electricity Market Reform is a package of reforms for the electricity sector of UK introduced in April 2013 designed for large scale projects more than 5MW:
- The CfD is based on a difference between the market price and an agreed “strike price”. If the “strike price” is higher than a market price, the CfD Counterparty must pay renewable generator the difference between the “strike price” and the market price. If the market price is higher than the agreed “strike price”, renewable generator must pay back the CfD Counterparty the difference between the market price and the “strike price”.
- CfDs are concluded between the renewable generator and Low Carbon Contracts Company (LCCC), a government-owned company with Emission Performance Standard (EPS) is an emission cap for new power plants and banned the construction of non-CCS coal plants. Carbon Price Floor (CPF) designed to be gradually increased (starting from 2013) and augment EU carbon price. The CPF was set on the level of GBP 15.70 per
CO2 tons in 2013 and to be increased to GBP 30 per CO2 tons by 2020.
- CfD contracts are awarded for period of 15 years.
- Generators that want to participate in the CfD scheme must participate in allocation rounds.
Feed In Tariff Policy
The FIT scheme is a government program designed to promote the uptake of small-scale renewable and low-carbon electricity generation technologies. Introduced on 1 April 2010 and revised in 2016, the scheme requires participating licensed electricity suppliers (FIT Licensees) to make payments on both generation and export from eligible installations. There are three ways of FIT in United Kingdom:
- Generation tariff: your energy supplier will pay you a set rate for each unit (or kWh) of electricity you generate. Once your system has been registered, the tariff levels are guaranteed for the period of the tariff (up to 20 years) and are index-linked.
- Export tariff: your energy supplier will pay you a further rate for each unit you export back to the electricity grid, so you can sell any electricity you generate but don’t use yourself. At some stage smart meters will be installed to measure what you export, but until then the energy you export is estimated as being 50 per cent (75 per cent for hydro) of the electricity you generate (only systems above 30kWp need to have an export meter fitted, and a domestic system is unlikely to be that big). Similarly, the export tariff is index-linked.
- Energy bill savings: you will be making savings on your electricity bills because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.
- United Kingdom has witnessed great booming in solar energy due to high FIT in the last few years. Tariff rates and schemes are mentioned in Appendix.
Renewable Heat Incentives in the UK
It is initially introduced for the commercial sector, the scheme was extended to domestic use in 2014. Its purpose is to encourage the switch from traditional to renewable heat technologies, such as solar thermal panels, biomass boilers, pellet stoves and more, to reduce the country’s carbon emissions. It provides a 7-year long support for owners of such systems through quarterly cash payments, the amount of which depends on the type of technology and the latest related tariffs. The property must first obtain an Energy Performance Certificate (EPC) assessing its energy efficiency and how it could improve, which is required for the RHI application.
Free Solar Panel Initiatives From the UK Government
If you cannot afford to buy solar panels, you might be eligible to get them for free. You should consider, however, that the panels would be owned by the energy company and you would not benefit from the Feed in Tariff, which would go to the installer. You would still save money on your electricity bill and use clean energy, with no additional returns. In 20 years, the savings difference between getting free solar panels versus buying them would amount to more than £10,000!
Another factor to consider is that selling the home with a contract attached to it could be an issue, even though solar panels are proven to increase property values. If you are not planning to sell your house in the following 20 years, however, you shouldn’t worry about it.
In conclusion, solar energy has been witnessing great expansion in the United Kingdom in the last few years towards achieving 2020 plan. This has been secured and achieved through the government regulations and policies to encourage the public and private sector towards the renewable energy. New record has been achieved in United Kingdom in 2018 where 1.94 TWH of power has been generated by solar energy between July 10 and July 9 beating the previous record of 1.77 TWH.
D. E. C. C. (2013, November 5). UK renewable energy roadmap: 2013 update. Retrieved from
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255182/UK_Rene wable_Energy_Roadmap_-_5_November_- _FINAL_DOCUMENT_FOR_PUBLICATIO___.pdf
R. E. N. C. (2016). Renewables 2016 Global Status Report. Retrieved from