* 250 MW of solar capacity by end-2012 is achievable
* UK government reduces support for large-scale solar
By Adveith Nair and Nina Chestney
LONDON, March 18 Asset management firm Foresight
Group expects Britain's installed solar capacity to rise sharply
this year despite a government proposal to reduce support
tariffs for large-scale solar projects.
Britain proposed on Friday cutting financial support for new
solar plants with a capacity over 50 kilowatts (KW) from Aug. 1
because it wants to focus instead on supporting smaller
household and community-level projects. [ID:nLDE72H125]
But even amid the regulatory changes, the UK market should
grow "significantly" by the end of next year from 50 megawatts
(MW) of installed capacity last year, Jamie Richards, chief
executive of Foresight Solar, told Reuters.
"50 MW is about 150 million pounds' ($242.2 million) worth
of installations," Richards said. "Maybe 250 MW is achievable,
depending on how fast installers roll out their propositions."
Foresight, which manages solar power assets worth more than
150 million pounds, would now turn its focus on the smaller
scale projects in its pipeline, Richards added.
"We were alive to the regulatory risk in the sector, and
wanted to develop a pipeline that we would be able to invest in
-- whichever segment took off in terms of momentum -- and was
able to be sustained by the incentive package," he said.
"The domestic and schools sector, sub 50 KW, is where we've
now focused our efforts and where we expect to invest."
Richards is not alone in his thinking.
British energy efficiency specialist Eaga EAGA.L said on
Thursday it had secured 300 million pounds for its project to
install solar panels on over 30,000 UK homes. [ID:nLDE72G0GC]
Foresight's plan to raise 50 million pounds for UK solar
investment this year, combined with Eaga's announcement, would
double the market this year.
"There is momentum there," Richards said. "Banks have come
to terms with lending to domestic projects."
Concerns persist that Britain's plans to cut financial
support for large solar power projects may stunt the nascent
sector's growth, push investors abroad and prevent the country
from meeting its renewable energy targets. [ID:nLDE7161Y1]
The decision six weeks ago to review support for solar
installations has already caused at least three funds that were
focused on large-scale projects, including Matrix, Triple Point
and Ingenious, to withdraw their propositions.
Richards said a balanced incentive programme across both
small and large-scale projects -- like in some of the world's
biggest solar markets including Germany, Italy and Spain --
"Typically, feed-in tariffs are higher for smaller scale,
domestic-sized assets," he said. "If budgetary concerns are the
issue, then you'd expect more to be targeted at ground-mounted
(solar parks), because you get the same capacity at less cost to
"But the government seems to prefer to target the sub 50 KW
sector, which is a fundamentally more expensive way of funding
Another option, Richards said, would be to follow in Italy's
path and limit the size of greenfield projects on agricultural
land, with no such limits for brownfield sites.
"That's the logical thing to do, but (it is) probably
unlikely to happen," he said.
OTHER MARKETS ATTRACTIVE?
While the outlook for the UK domestic market seems bright,
will investors look to move to other markets that might now seem
Richards conceded that might be a possibility, but said all
major EU countries in the solar sector had generated some
uncertainty and investors could look at markets outside of
"The U.S. is now growing quickly and Australia looks like it
might be on the cusp of growth," he said. "The regulatory risk
profile in those two countries should be better than in Europe."
But it might not be easy to switch to those countries.
"If an investor has the choice, and has the means of
accessing those other countries, then yes, (they could) divert