UK feed-in tariff could lead to 250 MW PV market by 2011

UK: The UK Government’s announcement today regarding the introductionof a feed-in tariff for photovoltaic (PV) installations will kick-startthe country’s PV market, predicts global analyst firm IMS Research.

Accordingto IMS Research, photovoltaic (PV) installations in the UK have beenextremely low to date, with the Government instead choosing to supportnuclear and wind power to meet its commitment to increase supply fromrenewable sources. However, the announcement to pay up to 41.3 penceper kWh (€0.47) for systems up to 5 MW is anticipated to quicklystimulate demand for PV and establish a significant new market for PVsuppliers.

Ash Sharma, Renewable Energy Research Director,commented: “The announcement presents an even higher feed-in rate thanwas originally proposed. This is likely to generate a significant PVmarket in the UK, though it will take some time to get traction due tothe need for all installers to be registered under the scheme. The UKhas similar irradiation levels as Germany and without a FIT just 5 MWof new PV power was installed in the UK in 2009. However, theintroduction of this FIT could lead to 250 MW of new PV capacity beinginstalled in 2011”. This compares with the 6000 MW of new PV capacityinstalled in Germany in the last three years.

Despite therelatively low irradiation levels in the UK, the recent falls in PVcomponent prices coupled with the FIT’s reasonable payout levels couldsee a return on investment within 12 years. Given that the FIT offerswide support for most system types and is guaranteed for 25 years,significant investment in this sector now seems inevitable.