30.10.2011

Proposed Feed-in Tariff cuts and events from the last few days at the UK Birmingham conference

I have just returned from a 3 day conference at Solar Power UK in Birmingham, and I'm still reeling from the news which dominated and overshadowed the conference, the proposed cuts to the feed-in tariff and the whole shambolic way in which this has been mis-managed. Cuts which are not even meant to have been decided without, as the minister Greg Barker clearly stated, "close consultation with the industry".

This is how the events unfolded. Just days before the conference, rumours were spiralling of a cut from current 43.3p to 9p per kWh. Then the FT reports a new less drastic cut to 20p, which appeared to be have all the signs of a classic case of softening and political spin, suggesting we should be thankful for small mercies and grateful to have anything at all.

Then on Friday the leaked report on the Energy Saving Trust website, suggesting the new 21p rate would be imposed from December 8th, less than 6 weeks away. A blunder or a deliberate leak?

Let's look at the facts as they are and the impact it could have on the solar industry:

The Tariff is currently set to 43.3p per kWh for home  installations and almost everyone in the industry agree this is too high .

While costs of solar pv panels have reduced significantly, the same is not the case for the service element.  The price of solar panels only reflects a percentage of the cost and it is not possible to cut salaries by 50%.  More likely many smaller companies just will not survive.

The UK has seen a tremendous boost to solar since the introduction of the FiT.  100,000 installations and 25,000 new jobs created.  The success of the 305 MW install would not have been possible had it not been for private investors, not fat bankers but regular investors.  Reduce the tariff to 21p and the return is no longer sufficient. The government claims to encourage a free market and entrepreneurial spirit at the same time it is killing it.

The facts are solar has unique potential. Solar panels are hugely popular. We have seen an incredible take up in the UK since the feed-in tariff was introduced in April 2010, they allow people to "reconnect with the energy they use", encourage savings and reduce dependence on The Big Six utilities. But the industry requires what is in reality a small amount of money to see it through to grid parity.

Put it into perspective  £860 million was set aside for solar.  The costs of decommissioning our nuclear power stations is estimated at £55 billion. Yet the Government seems to think that's OK because we are going to build new nuclear stations. So where is the logic in that?


I listened to Greg Barker in his speech on Thursday telling us that he is "committed to solar", that this is the "greenest Government ever" and he is personally dedicated to "sustaining jobs". I really hope this is the case, and the Government sees the potential harm it could be doing before it is too late.

Support your solar industry at  http://www.oursolarfuture.org.uk/