There may be brighter times ahead for Scotland’s solar sector

Alastair Collin is a Senior Associate, Turcan Connell

Scotland’s dreich image does not lend itself readily to an association with solar panels, yet there is research to show that solar PV installations in parts of Scotland, especially the east and north east, can perform as well as similar installations south of the Border owing to comparable levels of solar irradiance. Well-built developments in this sector may be competitive.

The withdrawal of subsidies for large-scale solar PV in spring 2017 stalled the industry but, as costs continue to drop and other development options emerge, impetus is again likely to grow.

Large-scale solar can again be eligible for Contracts for Difference, a mechanism for supporting low carbon generation, while the price of solar modules has dropped by 90 per cent since 2010. Steady improvements to solar cell and solar panel technology, plus improvements in the solar cell and solar panel production, are reducing costs. Coupled with innovations in battery storage, this means subsidy-free development of solar technology will be increasingly possible, initially in the form of hybrid solar and battery storage and/or wind developments.

The UK’s first subsidy-free solar development (solar 10MW and battery 6MW) has been operational for some years and 352MW is in the “planning pipeline” or awaiting construction in Scotland to add to the 378MW already built. Some commentators have identified the potential for another 4-6GW coming from solar power in Scotland in the next decade.

Last year’s announcement that the UK’s largest solar farm (450MW), to be located in Kent, has been granted planning approval, highlights the maturity of the solar industry.

What factors will assist and/or inhibit development? Usual property constraints apply so any need to access or run cables to a development through third party land or negotiate with a mineral operator, another renewable operator with property interests in the vicinity or agricultural tenant, may have an adverse impact on project economics. However, none of these should be a show-stopper; it is usual to encounter and resolve any issues caused by such interests).

Sites which are south, south east or south west facing will be best, ideally with some natural screening to minimise visual intrusion and without shading from trees. Former airfields and other brownfield sites have often been favoured owing to their flat, less visible nature but agricultural sites can also be developed and grazing of sheep can generally continue under and/or alongside panels, allowing mixed uses.

Most important is access to, and capacity on, the grid. To maximise development potential, there should be a large energy user nearby (who has a long-term commitment to the area) willing to purchase electricity, either off grid by a private wire supply using a dedicated power cable, or alternatively through a corporate Power Purchase Agreement (PPA), a long-term agreement (typically up to 20 years) where the user agrees to buy electricity at a fixed price from a specific development, but with the power being channelled through the national grid.

However, few Corporate PPAs have been entered into recently as wholesale electricity prices have been low. A period of sustained higher prices may change this and further add to the potential for this sector.

Yet landowners should proceed cautiously before signing up with developers offering solar projects. It is vital to bear in mind that a grid offer is personal (unlike planning consent which runs with land) so beware of developers offering to make grid access applications (and seeking letters of authority from a landowner to do so).

It is better for the landowner either to explore making its own application before putting a site out to tender with several developers or to give consent for a developer to apply but only on the basis that any grid offer is transferred by the developer to the landowner if contract terms cannot be agreed, or the project does not proceed.

As pressure to decarbonise our economy grows, and with further innovation in the offing, there may be brighter times ahead for this sector.

Alastair Collin is a Senior Associate, Turcan Connell

There may be brighter times ahead for Scotland’s solar sector - Alastair Collin