Neil Bruce

The concept of solar power in Scotland is often met with a raised eyebrow and general quips about our beautiful country’s weather. But, looking beyond the cynicism, the reality is this – it does work, and there are opportunities.

So where is the industry at the moment? Deployment of solar PV in Scotland is currently around 200MW (leaving aside the position of solar thermal, the market for which has struggled and which could be the subject of a separate blog itself). This figure is only a fraction of the capacity across the UK as a whole, and shows that the country is lagging behind; but also highlights the huge potential to develop where opportunities do exist.

For the solar industry, like many others in the current political climate, uncertainty prevails - and investors do not like uncertainty. A lack of clarity and clear policy is hampering progress. Added to that are the usual concerns regarding grid constraints, potentially large rates liabilities for commercial rooftop installations, and inevitably the reduction in the subsidy levels and digression of FiTs have created issues for development.

Having said all of that, it is clear that there remain levels of optimism in the industry and areas in which progress can be made. Development of solar is viable – costs are coming down, new business models are being developed, innovation/research is being carried out to improve the technology and efficiency, storage solutions and co-location of equipment is being progressed and, as projects are being completed, the contractual documentation and processes are becoming more familiar and streamlined. The industry is encouraged by the fact that the Scottish Government is making the right noises in terms of support for solar (despite the position being taken at Westminster). Climate change targets remain and it is clear that solar can have an important role to play in meeting those.

Opportunities exist in the commercial/industrial sector; the ability of consumers of electricity to use solar installations to help power their businesses at a cheaper price, whilst also helping the climate change cause, is an obvious attraction. For developers, the opportunities exist to provide this solution to industry via a private wire connection and corresponding Power Purchase Agreement (PPA), meaning the electricity generated is sold to the consumer at a cheaper rate than they would otherwise be paying. Even for those consumers not in a position to enter into a PPA, there may still be interest in investing in a solar scheme installed on their property.

The industry is also clear in its desire to have solar technology integrated into all new buildings, in a meaningful way as opposed to simply as a box-ticking exercise. This applies equally to local authority projects, new residential developments and new-build commercial facilities (who are well advised to consider how to integrate solar capacity into their project - in terms of the potential to reduce electricity costs, as well as part of ensuring the energy efficiency of the building means it is not subsequently caught by the regulations recently introduced under Section 63 of the Climate Change (Scotland) Act 2009).

Community schemes are another area where opportunities exist. There is definite appetite at government level to provide support required to allow such projects to be developed. While the structure and the funding of such projects present challenges, community schemes can be attractive on various levels and can be developed in Scotland (as evidenced by the Edinburgh Solar Co-operative’s project alongside The City of Edinburgh Council).

Co-location of projects is also an area that continues to be discussed. It has long been acknowledged that the concept of solar and wind works, and this remains very much on the agenda for the industry. The concept does provide a number of interesting challenges – not least the grid sharing relationship and how the relevant agreements are documented – but, again, this is an area where opportunities are being explored. Co-location of battery storage is also on the agenda given the advances being made in storage technology.

So, out of the potential clouds, there definitely remain rays of light and reasons for optimism in the solar market. These are not messages that have not been heard before, and so the key will be for the industry to drive forward positive action as opposed to further debate and discussion. If that succeeds then the rise of the industry in Scotland may well be achieved.

Neil Bruce is a senior associate at Burness Paull