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DECC claims commercial solar install costs rose in Q1

The Department of Energy and Climate Change has claimed that the average cost of installing solar PV increased at the start of the year, coinciding with a stark reduction in feed-in tariff subsidies.

Data released by DECC last week showed that the mean cost of installing solar in the commercial deployment bands of 4-10kW and 10-50kW rose by £69 and £80 per kilowatt respectively between January and February this year.

The purported increase came despite a trend for prices to decrease as the technology matured and occurred just as the government enacted a new feed-in tariff regime which reduced the FiT for 10-50kW installs to 4.59p/kWh.

DECC refused to speculate on the cause of the increase, however the Solar Trade Association’s Leonie Greene suggested that the solar industry could not deliver continued price reductions if activity was curtailed.

“Maintaining cost reductions requires investment, and that was why we set out a steady glide path to parity for solar in our Solar Independence Plan that would give companies the forward vision necessary,” she added.

Some within the solar industry have suggested that the increase – and subsequent rebound – could have been caused by a surge in demand. A large number of commercial installations that were pre-accredited under the former regime need to be finished by 1 September.

Other potential causes for the increase include installers seeking greater margins for work as productivity decreases and a lack of competition in the sector following a large number of installation businesses withdrawing.

However other solar installers have scrutinised DECC’s data – which itself is a sample of installation data supplied by industry watchdog the Microgeneration Certificate Scheme – and dismissed out of hand the claim that prices are rising.

Brighton Energy Cooperative’s Will Cottrell said that a number of 50kW-sized installations had been completed on the south coast at prices around £8-900/kW, dramatically lower than the circa £1,200 DECC’s figures have claimed.