In December 2012 the UK government published its response to the consultation on the Renewables Obligation banding review. This will result in the level of Renewables Obligation (RO) support being cut for solar projects commissioned after 31 March 2013, with further cuts to follow.
Although the cuts will not be as severe as initially proposed, the reduction from the current 2 Renewable Obligation Certificates per megawatt hour will still be more severe than many in the solar industry had been hoping for and will have an effect on the number of viable projects. At the time of writing, we are already seeing a huge rush of large-scale projects under construction – or to be constructed – in order to be accredited before 31 March deadline. For example, Solarcentury is hoping to complete the construction of a 6.3MWp park at Chalcroft Farm near Southampton within three months; Hive Energy is investing £72 million in nine solar parks, all of which it hopes to be operational by the end of March.
A report by market analyst Solarbuzz notes that this push to complete large-scale projects will mean that the UK solar market will exceed 1.6GWp; 94% of this capacity will have been installed within the past two years. But what will happen after 31 March? We have set out below a few issues that will need to be considered when ascertaining whether a project will be viable.
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