Solar farms: funding, planning and impacts

The majority of Government policies relating to solar farms are devolved. Following a large number of recent and proposed changes to polices which apply to England, England is the main focus of this paper, unless stated otherwise. Members are welcome to contact the library for information about policy in all the devolved administrations. The National Assembly for Wales Research Service has produced a paper which sets out the position in Wales.

Update on subsidies and funding cuts – 17 December

On 17 December 2015, the Government announced a new package of renewable energy cost controls in response to its consultation on feed-in tariffs (FITs) and the Renewables Obligation (RO), accompanied by a Government press release. The Library Briefing Paper is in the process of being updated to reflect these developments. A brief summary of the main points relating to solar farms is below:

• In response to the consultation on FITs the Government is re-introducing pre-accreditation for FITs from 8 February 2016, has significantly reduced support available for stand-alone projects through feed-in tariffs by 71% and has decided to keep the FITs scheme open beyond January 2016 due to the cost control measures being introduced as part of the response.
• In response to the consultation on changes to financial support for solar PV the Government announced it will close the RO across Great Britain to new solar PV capacity at 5MW and below from 1 April 2016 and remove ‘grandfathering’ (a fixed rate of support from the date of accreditation) from 22 July 2015 for solar projects in England and Wales with an exception for those which meet the significant financial commitment criteria as of 22 July 2015.

Converting solar to energy

Solar farms are arrays of solar photovoltaic (PV) panels to generate electricity at a large scale, usually to feed into the national grid. They are a renewable source of energy, range in size from 1 acre to 100 acres and are normally situated in rural areas. There are 426 solar farms currently up and running in the UK in addition to 70 that are currently being built and 123 that have been proposed. The Renewable Energy UK interactive map shows where the solar farms are in the country.

The UK is required to meet an EU renewable energy target of sourcing 15% of its energy from renewables by 2020. One way of reaching this target would be to use electricity generated from solar farms, including solar PV.

Based on the average annual consumption of a household, for every 5 MW installed, a solar farm will power approximately 1,500 homes for a year. Approximately 25 acres of land is required for every 5 megawatts (MW) of installation. Currently, the largest contribution to renewables and waste energy in input terms (around 72 percent) is from bioenergy (excluding non-biodegradable wastes), with wind generation and hydro electricity production contributing to the majority of the remainder.

National planning policy

In March 2012 the Government published the National Planning Policy Framework (NPPF) which applies to England only. It is a material consideration for local planning authorities (LPAs) considering planning applications. The Government Planning Practice Guidance has been published online to accompany the NPPF, which should also be taken into account when planning decisions are made. It sets out specific considerations for local authorities taking decisions in relation to large-scale ground mounted solar photovoltaic farms.

The NPPF also makes clear that local planning authorities should take into account the quality of agricultural land when taking decisions. The Government’s Planning Portal website highlights that “issues such as loss of view, or negative effect on the value of properties are not material considerations.”

Subsidy and funding cuts

The Government has reduced the support for solar farms, where solar arrays are ground mounted on either agricultural of brownfield land. They have removed subsidy support through the RO for solar farms larger than 5MW and have significantly reduced the support available for stand-alone projects through the removal of FITs accreditation. They have also limited the Common Agricultural Policy (CAP) funding to solar farms on agricultural land.

The Government is currently consulting on plans to close the renewables obligation for solar farms at or below 5MW and reducing the range of FIT financial support available for stand-alone projects.

Changes to the renewables obligation

On 13 May 2014, the former Government published a consultation paper setting out measures to control spending on new solar PV capacity above 5MW within the RO, and to promote the deployment of mid–scale building-mounted solar PV in the small–scale FIT scheme. This was specifically aimed at reducing support for solar farms. On 2 October 2014, DECC published a response to that consultation, confirming the decision to close the RO to new solar PV generating stations above 5MW in scale from 1 April 2015, and to additional capacity added to existing accredited stations from that date, where the station is, or would become, above 5MW.

On 22 July 2015, the now Conservative Government published a further consultation paper on changes to financial support for solar PV including proposals to bring forward the closure of the Renewables Obligation to new solar PV projects of 5MW and below to 1 April 2016.

Pre-accreditation of FITs

The Government has proposed to remove pre-accreditation and pre-registration, which would mean that projects would only receive the tariff available when they submit their accreditation to Ofgem.

Feed-in Tariffs

FITs are part of a set of initiatives to encourage the deployment of renewable energy across the UK. The objectives of the scheme on its introduction were:

• Encourage deployment of small scale (up to and including 5 MW) low-carbon electricity generation
• Empower people and give them a direct stake in the transition to a low-carbon economy
• Assist the public take-up of carbon reduction measures
• Foster behavioural change
• Help develop local supply chains and drive down energy costsCommon Agricultural Policy subsidies
• On 19 October 2014 the Defra announcement “Subsidies for solar farms to be cut” stated that farmers who choose to use fields for solar farms would not be eligible for any farm subsidy payments from the Common Agricultural Policy (CAP), effective from January 2015.
• The Consultation on a review of the Feed-in Tariff scheme, published in August 2015 by DECC, includes a raft of proposals to change the FIT’s scheme for solar PV, wind and hydro power.

Contract for Difference (CfD)

A Contract for Difference (CfD) is a private law contract between a low carbon electricity generator and the Low Carbon Contracts Company (LCCC), a government-owned company. CfDs replaced the Renewable Obligation Certificates (ROC) scheme for solar developments above 5MW from the start of April 2015, with ROCs set to end entirely in 2016.

Interactions with other policy

The FIT review followed a raft of changes with impact on the low carbon and renewables sector. These included early closure of the Renewables Obligation to onshore wind, changes to planning guidance on onshore wind, removing of grandfathering of support rates for biomass conversion under the RO, closure of the Green Deal scheme aimed at improving energy efficiency, the proposed sale of the Green Investment Bank and the abandonment of the 2016 zero carbon homes target.

All these changes have had an impact on investor confidence which was reflected in the UK dropping out of the top ten more attractive countries to invest in renewables (from eight to eleventh) for the first time since the Ernst and Young Renewable Energy Country Attractiveness Index was introduced in 2002.

Solar Farms and Agriculture

The National Farmers Union (NFU) has published briefings on solar power, solar photovoltaic electricity in agriculture – on your roofs and in your fields, setting out the benefit to farmers, the potential for continuing to use the land, and bringing it back into use after the end of a project.

The Building Research Establishment (BRE) have also published guidance for farmers wanting to install solar panels titled agricultural good practice guidance for solar farms. This gives information about design and layout of solar farms, conservation, grazing, construction and along term management.

Environmental impact

DECC published a UK solar PV strategy in April 2014 which stated that “DECC and Defra will work with industry to understand better the effects (both positive and negative) of solar farms on biodiversity.”

The strategy also highlighted best practice guidance from the Solar Trade Association (STA), which are a series of 10 voluntary commitments that solar farm developers, builders or tenants who are members of the STA have committed to complying with.

The impacts on wildlife of any proposed array will very much depend on the characteristics of each site. Natural England has produced a note solar parks: maximising environmental benefits which addresses landscape and environmental impacts, in this it makes clear that whilst solar arrays may be inappropriate in some areas they may be used to enhance biodiversity in others.

Meeting EU targets

The Renewables Directive, 2009/28/EC, is a European Union directive which mandates levels of renewable energy use within the European Union. The directive requires that 20%of the energy consumed within the European Union is renewable by 2020. As part of this target the UK has been asked to produce 15% of its energy from renewable sources by 2020.

Progress has been made against this 15% target. Using the methodology set out in the Directive, provisional calculations from DECC show that 7.0 per cent of energy consumption in 2014 came from renewable sources; this is up from 5.6 per cent in 2013. However the 2015 EU report on progress towards the 2020 renewable energy goals stated that The UK, France and Netherlands were set to miss the EU 20% target and should review their policies to get back on track. However there has been currently some uncertainty surrounding the ability of the UK to meet this target, following a leaked letter from Government and evidence given by the Secretary of State to the Energy and Climate Change Committee.