BEIS-backed PV uptake study identifies scope for SEG changes

BEIS-backed PV uptake study identifies scope for SEG changes

E.ON’s Solar Reward scheme was to “bridge the gap” between the feed-in tariff and the Smart Export Guarantee, which came into effect in January 2020. Image: E.ON

A Guarantee Scheme, financial support and options for surplus energy would all boost domestic solar uptake.

This is according to the findings of a study conducted by Basis Social on behalf of the Department for Business, Energy and Industrial Strategy (BEIS) which surveyed 889 households across Great Britain and conducted interviews with 15 Small and Medium Enterprises (SMEs).

This found that while uptake of the Smart Export Guarantee (SEG) is likely to be high among new solar panel owners, the variable structure makes it less of an incentive to install compared with the feed-in tariffs, which had guaranteed payments.

There is therefore scope to make alterations to the SEG to encourage adoption of solar PV, the report said, with this potentially including increasing awareness of the scheme, setting a higher minimal rate of return and introducing fixed rather than variable tariffs for a limited adoption period.

Fixing and increasing rates of return are also likely to be influential for small and micro business with lower energy uses.

Awareness of the scheme is key, however, with targeted communications needed if it is to play a meaningful role in the adoption process.

The report also found that in order to drive adoption there is a need to address risk through the development of a Guarantee Scheme, although it added that as given warrantees are commonly available from solar manufacturers, this barrier may in part be addressed by raising awareness of existing schemes.

Additionally, there is also a need to support financing and spread out the upfront costs through potentially creating a policy environment to encourage the adoption of new financial products, such as Property Assessed Clean Energy style loans.

When it comes to SMEs, the commercial viability of solar is the primary concern, although the economics are attractive over a 5-10 year horizon.

However, potential increases in business rates were found to be the single biggest barrier for the adoption of solar, with SMEs feeling it should be a government priority.

Business rates have been regularly discussed as a barrier to commerical solar uptake, with an oft-cited example being Lidl, which saw its business rates increase by 528% due to changes in the valuation of solar installations at its sites. The likes of Solar Energy UK and Regen have therefore called for business rates relief, with the issue also being highlighted by the Climate Change Committee.

While helpful for small and micro businesses, overall access to capital and financing is not a major barrier to the adoption of solar panels. However, creating a stable policy environment to plan both upfront costs and returns is a concern, the report said.

SMEs also need a simple step-by-step guide for the factors they need to consider when adopting solar. The report stated that, given the low engagement with government websites, disseminating such information via energy companies and installers is more likely to support its use.

The survey also looked at how supportive homeowners and SMEs believed the government to be towards solar, with 40% of participants who were considering solar believing it is now a lower priority for the government. SMEs, meanwhile, believe that government support for solar has waned relative to other low carbon measures such as electric vehicles, with this mainly due to the changes and closure of the feed-in tariff.

Lastly, the survey collected data on the demographics of those considering solar, with this finding that 61% were female, 49% were younger than 35 and 18% were from ethnic minorities. Additionally, the majority were of a higher social grade (40% AB).

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