PV UK shipment forecast for DB solar report

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PV in the UK
by Felice Lucia

The UK solar market has been negatively affected by ongoing reforms to clean energy programs in 2013, starting with April 2013 cuts to Renewable Obligation Certificate’s (ROCs, which must be purchased by electricity suppliers and are similar to state renewable energy portfolio requirements in the US). The BBC reported in the beginning of December that further cuts to wind and solar incentives were likely coming in 2015, but this applies to “strike prices” (effectively FiTs) rather than ROC’s. David Cameron recently pledged to roll back ‘green levies’ which indicates lessening support during an election cycle.

Q3 demand in the UK was weak given short supply pending the EU trade case, but more certainty and potential cuts should help spur development into 2014.

Greg Barker (Energy Minister) has been an outspoken critic of Greenfield ground mounted PV (due to local opposition) and his general sentiment is much more positive on DG, particularly for the commercial segment. Since the compliance period starts/ends in April, there is often a rush in Q1. Producers of solar electricity are currently receiving 1.6 ROC’s, which will decrease to 1.4 ROC in April 2014, 1.3ROC in 2015, 1.2 ROC in 2016. Furthermore, commercial scale investment will be helped by the ROC incentive structure announced earlier this year of 1.7 ROC/MWh in 2013, reducing by 0.1 every year.

The government recently released the “UK Solar PV Strategy Part 1” report, which suggested solar can make a meaningful contribution to the country’s goal of 15% renewable generation by 2020. Greg Barker also recently suggested that the country can achieve a long term goal of 10GW+ by 2020 and would update his official strategy by spring 2014. Unofficially he has indicated a 20GW target. ~2.5GW of solar capacity was in place in the UK by October 2013. We forecast 1.1GW demand in the UK in 2013 and 1.3GW in 2014.

source: Deutsche Bank Markets Research, 6th January 2014

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