Solar sector calls for CfD auctions every six months

The government should increase the frequency of Contracts for Difference (CfD) auctions to create a better pipeline for solar projects, the head of the sector’s trade body has urged.

In a letter to business and energy secretary Alok Sharma, Solar Trade Association chief executive Chris Hewett called for the introduction of regular six-monthly auctions as part of the green recovery package the government is drawing up.

Solar projects were readmitted to the scheme earlier this year alongside onshore wind but the STA says in its letter that the government should further reform the mechanism in order to stimulate the sector.

Pointing to the 2GW pipeline of shovel-ready solar installations that have both planning permission and a grid connection, Hewett told Utility Week that CfD auctions should “ideally” be held every six months.

“If you are waiting a long time for one auction and another two years for another, it’s a very long time for such a rapidly deployable technology as solar, particularly at the moment as we need to deploy infrastructure quickly.”

As the “lowest cost” renewable technology eligible for support through under the CfD scheme, solar is capable of delivering “substantial additional capacity” and could cross subsidise other more expensive technologies, according to a policy paper that accompanies Hewett’s letter. He said more frequent auctions would provide more opportunities to take advantage of falling technology costs.

The STA said reforming the CfD process, including by lifting the current capacity caps in auctions, could help the UK meet the target of deploying 40GW of solar capacity by 2030 that it has also urged Sharma to adopt.

Solar could additionally provide a more immediate boost to the economy than some other types of infrastructure which take longer to deploy, said Hewett: “Because solar is so fast to deploy compared to some of the heavier infrastructure technologies, we can make a material contribution to getting the economy going faster than some other [technologies] can. If you want to get the economy moving, solar can move fast.”

The STA has calculated that its proposed CfD reforms and business rate hike reversal could create up to 4,400 full time jobs per annum.

Hewett also told Utility Week that installations of solar projects are beginning to ramp back up as the wider lockdown on the economy eases. He said the number of inquiries is picking up and jobs that had been delayed in March and April are recommencing as households become more comfortable about having workmen on their properties.