Triodos Bank predicts 2011 solar financing crunch - 19 Jan 2011 - News from BusinessGreen

12/02/12 05.22

Triodos Bank predicts 2011 solar financing crunch

The head of business banking at Europe's largest sustainable bank has warned that many solar projects will fail to move forward this year as developers rush to secure financial backing before the government cuts the incentives available through its feed-in tariff scheme. Bevis Watts, head of business banking at Triodos, told BusinessGreen the bank expects to receive applications from significant numbers of large-scale solar farm developers in 2011. But he warned that many of them will be turned away, especially if they have not secured planning permission and other consents before applying for financing. Under the feed-in tariff scheme, individuals or developers who install renewable energy systems receive payments from their energy supplier based on how much energy they generate. But the government is set to review rates in 2012, or potentially sooner if installation rates are higher than expected, and has already identified scope to cut feed-in tariffs by up to 10 per cent.
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Watts said 2011 will be "a huge year" for solar developers as they rush to get projects under way before the incentives are cut. But he warned many projects are going to be under a lot of time pressure and will fail to secure planning permission or other relevant consents before 2012. "If people are talking early-stage projects to us, then it's just blue sky aspirations that won't become a reality, he said. "We have to assess their stage of development." He failed to put a figure on the proportion of expected developers that will not receive funding, but predicted "a lot will be unable to get everything done." Solar farm developers will be under further pressure to secure funding because climate change minister Greg Barker has strongly hinted that the feed-in tariff scheme will be reformed to limit the number of larger solar projects allowed to access the scheme. Triodos has today recorded its biggest ever annual growth. Its loan book increased 26 per cent in 2010, while lending to green firms and organisations grew by almost 44
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Triodos Bank predicts 2011 solar financing crunch - 19 Jan 2011 - News from BusinessGreen

12/02/12 05.22

per cent to 105m. Now Watts predicts 2011 will see further expansion, with the bank's UK arm expected to experience growth of about 30 per cent. He said the growth will be driven in large part by the rapid growth of the UK's solar market, which is relatively immature compared to other European countries such as Germany and Italy. Aside from solar power, Triodos is also planning to diversify its lending portfolio in 2011 as more forms of renewable energy become commercially viable. It plans to lend to hydro power, anaerobic digestion and biomass power plants and also expects to grow its existing onshore wind farm portfolio, providing planning problems are ironed out. "The number of renewable energy projects is increasing, and there's a critical mass of well established energy generators coming back to us, so its not just new entrants," he said.

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