Government should boost rooftop PV rollout by supporting domestic users – and use tax break to step up SME installations

Households and small businesses think government has ‘lost interest’ in rooftop solar and will not support those installing it, according to new research published by the Department for Business, Energy and Industrial strategy, but minor changes could boost installation by household and SME customers, especially if the government uses current measures, in place until March 2023, to push solar as a key opportunity for SME capital expenditure.
To increase the speed of rollout these consumers need more support: guarantees over panel performance and installation quality; help with the capital cost; a better export tariff; more information about using PV with batteries.
The research found that for SMEs, coming back after Covid, environmental considerations that are “increasingly seen as part of businesses’ license to operate” and the super deduction on capital allowances in place until March 2023, “provide a unique set of circumstances to encourage the uptake of solar panels”.
SMEs are concerned over the commercial viability of PV and a stable environment to plan upfront costs and returns is more important than a lack of access to capital. SMEs need a simple step-by-step guide for the factors they need to consider when adopting solar and as they have little engagement with government websites, this should be via energy companies and installers. The survey found business concerns over potential increases in business rates were a significant barrier for businesses and so was misaligned incentives between landlords and leaseholders.

Household opportunity
For households, the survey also suggested an opportunity to kick up installation rates, because the cost of panels had fallen and those with panels had found installation an easy process. But government should now:
• Address risk, for example via a government-backed guarantee scheme (which would cover the very low – 0.05% – failure rate) and accreditation of installers.
• Support financing and spread out the upfront costs by encouraging new financial products, such as Property Assessed Clean Energy (PACE) style loans. Such loans have a long payback horizon and importantly have debt tied directly to the property, rather than the owners.
• Highlight the potential for financial gains from installation by making relatively modest changes to the SEG design (potentially by fixing increasing rates for a defined period.
The survey said myth-busting is also important to bring in domestic users, to address concerns about cowboy builders, the suitability of the British weather for solar, and the impact that solar can have on carbon emissions.

Read the reserach in full here

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