The lack of a robust domestic manufacturing industry makes the UK highly dependent on imports to cater to demand. Recent manufacturing disruption in China is expected to impact the UK, with the market expected to stall and decline modestly by the end of 2020, says GlobalData, a leading data and analytics company.
Somik Das, Senior Power Analyst at GlobalData, comments: “Quarantine measures are likely to see development timelines being pushed back by at least a quarter, impacting the deployment of solar projects. Before the Covid-19 outbreak, the solar industry was coping with policy changes, which impeded its growth. However, the pandemic is now expected to slow the sector down even further. The annual installed capacity was projected to reach 290 megawatts in 2020 but has been revised to 220 megawatts.”
Slow-down for the sector
In 2015, the UK Government withdrew its support for large-scale solar and slashed feed-in tariffs (FITs) for small-scale systems. Later, the government replaced it with the Smart Export Guarantee in 2019, which resulted in a slowdown of the domestic market. Now the fall in solar PV additions due to pandemic would further hurt the sector by slowing it down.
Das continues: “The imposition of travel restrictions halted projects that are under construction. The restrictions are impacting the movement of workers and suppliers to construction and service sites. Disruptions along the supply chain are likely to contribute to an increase in equipment prices, which will hurt the economic attractiveness of the solar market.
On the other hand:
The fall in pollution in the UK is making PV more efficient
“The withdrawal of support for solar PV was executed to promote its development without the support of subsidies. Following the implementation of the Smart Export Guarantee, the market was not expanding as quickly as before with deployments being carried out mostly at the residential and community levels.
“Short-term power purchase agreements (PPAs) gradually emerged to provide relief for solar PV developers. But now, in the wake of the pandemic, the rising equipment costs would surely cause headaches to the solar PV developers. Thus, government need to intervene with measures to ensure minimal damage is caused to the interests of the developers, in this sector.” (mfo)
