Is the solar industry being held to ransom by DNOs?
Posted by Rupert Higgin on 30 August 2013 at 10:19 am
There appears to be little synergy or common ways of working between the seven main Distribution Network Operator companies (DNOs) in the UK, with each one having its own charges and processes. To get the best results, solar installers need to understand their business and develop relationships.
The lack of consistency between DNOs is immediately illustrated by their approach to the application process. Some DNOs will take the full 45 days to process a low voltage application, where others will push through more quickly. Our fastest application was five hours, while others have arrived at the last hour of the last day. Conversely, the 65 day application process for high voltage is usually much faster than low voltage applications suggesting the more complicated requests get pushed higher up the pile.
This uncertain processing time makes scheduling work impossible. For a start, it can take the full 45 days before you know whether the customer can have, for example, a 50kWp system or a 100kWp system and it is not commercially viable to do the full design work until DNO approval has been received. It’s hard to accurately predict the outcome of an application, as every customer is different depending on location.
The location of the proposed works also highlights differences. For example, in Lincolnshire the high number of renewable installations in recent years has put pressure on the network and the local DNO, as it can only allow so much energy to be released to the grid. Equally, upgrades to the network may need to be done, but if the DNO is not seeing the benefit of spending money this can hold back necessary works and even hamper projects in certain parts of the UK.
In some cases we have seen DNOs accepting upgrade work, whereas at other times the cost lands on the customer. On a recent application for a 1MW installation, the DNO cost to the customer was quoted at over a £1m for the required upgrade. However on other occasions, the DNO has paid for the upgrade work itself. There is little consistency and decisions appear to depend on whether an upgrade is in the DNO’s plans, if not, the project’s cost and viability can be seriously in jeopardy.
Then there are the costs, with charges varying from one DNO to the next. For example, Scottish Power charges a basic £500 connection agreement, whilst others, such as Western Power, don’t charge a connection agreement. Could this ultimately influence the solar spread in the UK?
Installations over 50kWp require a G59 witness test as part of the commissioning process, which adds a further opportunity for price conflicts. Western Power charge £4-500 for systems over 50Kwp, whilst Scottish Power only charge £1,000 for both the witness test and connection agreement together, while Scottish and Southern Electricity charge £2,500 for both, highlighting a definite lack of synergy.
As with most commercial enterprises, regular cost reviews are standard, but not always in favour of the customer. In a recent case a DNO approval for one customer cost £1,800, valid for the standard 60 days, two days after this period it increased by 33% to £2,400. This was attributed to an annual review of charges, however, had we known such an increase was likely to happen, we would have advised the customer accordingly.
In many of these cases there’s little that an individual solar installer can do to bring consistency, influence or policy change amongst DNOs, however having good and trusted relationships certainly helps the process. In one instance, a DNO announced that customers would be retrospectively charged £500 for low voltage applications. As most of the jobs had been completed and installed it was likely the costs would fall at our door, however an agreement was reached after a constructive conversation with the DNO in question.
Whilst installers scramble to understand and stick to the processes that DNOs impose, building relationships as a means to better manage the situation, can we hope for more synergy in the future? Is the solar industry and its customers being increasingly held to ransom by the often unpredictable and disjointed approach of DNOs across the country?Photo Credit: net_efekt via Compfight cc
About the author: Rupert Higgin is the Managing Director of TGE Group
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