30 September 2016

Member update: FIT solar installations plummet but commercial projects buck trend

The release of new figures from Ofgem on FIT installations have shown a 66 per cent drop in the number of installations registered in quarter two 2016, dropping from 45,156 in the previous quarter to 15,420 installations registered from April to June this year.

Although the sub 10 kW schemes are clearly experiencing a significant decline, the figures indicate other deployment bands are seeing growth.

Deployment levels

Chart 1 below, shows the significant drop in domestic installations registered in quarter one. The second chart highlights the continued capacity growth. 282.5 MW has been added between April and June 2016, this includes 204 MW of solar PV, an 18 per cent increase compared with the same period last year.


(Note: figures are taken from the accredited FIT installations on the Central FIT Register)

Solar PV installations continue to dominate; making up 72 per cent of the 282.5 MW accredited this quarter. As would be anticipated for the region leading on solar PV, the south west has the largest proportion of FIT capacity at almost 20 per cent, whilst London falls behind with only 2 per cent.

What is behind the strong deployment?

Given the precipitous falls in the FIT, the dramatic drop in domestic installations was expected, but the strong deployment figures in larger projects was not. One possibility is that Ofgem’s figures for the number of projects installed are misleading. They seem out of sync with the figures for projects accredited under the cap system for example – about 70 MW of capacity was accredited in quarter two.

However, talking to leading installers it does appear that the commercial rooftop sector, which has historically failed to live up to expectations; is beginning to gain traction with many big businesses with commercial decisions based on energy savings rather than reliant on the FIT. Pre-accreditation for commercial rooftop installations is also still available as government concluded commercial rooftop installations require more investment certainty.

The challenging market for sub 10 kW schemes and the ending of support under the Renewables Obligation for large scale ground mounted solar has led to much greater focus on the rooftop sector, which is also a factor in its resilience.

Future market trends

Although the overall drop in accredited installations shows the impact of changeable policy, particularly for domestic users, the continued capacity growth, predominantly for commercial projects highlights the resiliency of market drivers. Renewables now produce over 25 per cent of our power and the shift towards a more decentralised and smart system seems unstoppable, as markets rather than government enable sector growth.

One promising area is adding storage to solar systems either at domestic or commercial level. Our recent white paper “Energy storage – towards a commercial model”, examines the potential of the rapidly developing energy storage market and we have set up a regular storage forum.

Whilst subsidies are less important policy and regulation continues to play a key role in these new business models. In response to Ofgem’s proposals on charging for the grid we have released a paper on “Network Charging for a Flexible Future”, calling for a review of how we charge for the grid and what should be considered within this review. Read to find out more.

Author: Amy Brimmicombe

Contact: abrimmicombe@regensw.co.uk