This month has seen two big changes to operational revenue streams for renewables. On one hand the government seems determined to destroy investor confidence and the solar industry with the second unscheduled decreased in the Feed in Tariff (FIT) in the last ten months. Whilst on the other the long awaited consultation on ROC banding, although not entirely positive, is in the main a welcome firming up of policy direction.
FIT payments for sub 4kw Solar Systems
The government plans to halve FIT rates for solar PV installations registered after midnight on 11 December 2011. One of the architects of the UK's FIT scheme Alan Simpson, called the unscheduled review "economically illiterate and ethically fraudulent". He went onto comment "It's the sort of success story (the rise of the UK solar industry) that any government in their right minds would want to look for”. "It's the only sector that has delivered 25,000 new and sustainable jobs in the last 18 months”.... “it outstrips the cost of the whole scheme."
Rod Ellison shares this view and although in terms of C02 reduction PV might not be the most effective form of renewable technology it is quickly and easily deployed. It seems farcical that an industry which was creating green jobs and altering customers’ ideas on energy use has been rendered uneconomic. Speaking at a CBI dinner recently, John Cridland, the director general launched a scathing attack on the cuts, warning that it risks derailing the UK's emerging green economy and resulting in thousands of redundancies. He went onto comment that the changes are the latest example of instability in the government's energy policy framework and summed up rather well with "Some companies have invested heavily in solar PV systems, and in the supply chains needed to install them. That commitment has been undermined by the FIT decision, so industry trust and confidence in the government has evaporated. This bodes poorly for investment in future initiatives” for instance the Renewable Heat Incentive (RHI) and Green Deal investments.
Some argue that the scheme was over subsidised and effectively a stealth tax. Nonetheless many ethical and community schemes will be damaged by the changes. A local example is Empower Community, a social enterprise aiming to bundle small solar projects (to be installed on social housing) into portfolios suitable for pension funds. The changes have put a £175m investment on hold and the company say it is no longer viable to proceed at the revised rates.
To conclude maybe solar PV is not the solution but it could be part of a solution. It is rather bemusing that the greenest government ever seems determined to halt the rise of a technology the public seemed to understand and willing to adopt.
Solar future is actively lobbying against the changes and provides excellent information at:
They have also produced an excellent video (on a lighter note) which uses David Cameron’s own words!