Ever since the Comprehensive Spending Review last October uncertainty has hung over the UK’s emerging solar industry. The Feed In Tariff policy was subject to a 10% budget cut, leading to disagreements about how best to constrain growth in the sector. In response, the Trade Body for the Industry, the Solar Power Group of the REA, has called for decisions to be evidence-based and to be made with the growth agenda in mind.
Gaynor Hartnell, Chief Executive of the REA
“Richard Lambert spoke his mind on the eve of his departure from the CBI, criticising the Government for its failure on growth. What’s happening with the solar tariffs right now is a text-book case study. They have been a success across all sectors, from domestic to commerce, housing associations to the larger field arrays. Jobs are up six – seven fold in ten months. Councils are rising to the challenge of the localism agenda, and looking to get involved in selling power, just as Government recently urged them to. The diversity of innovation and ambitions in the market caught Government
by surprise. But instead of celebrating the success it has let uncertainty fester. Our members fear a knee-jerk change in policy, when the ink is barely dry on the legislation.”
“This would cause tremendous damage,” she warns. “Changes to structure of the policy could lead to legal challenges and will have repercussions for investor confidence, reaching far beyond the small-scale renewable energy sector
. Government needs private finance to fund £200bn of low carbon energy infrastructure over the next decade. It can ill-afford to scare investors away.”
For these reasons the REA
believes it is too early and too risky to change the tariffs before 2012. REA
thinks hard evidence is needed in order to inform policy-making. It is essential to know what’s coming down the pipeline in terms of projects, taking into account supply chain issues, skills shortages, grid connection delays and planning. It has therefore commissioned consultants to gather market data, with the results due in three to four months’ time.
has also written to Energy Minister, Greg Barker, calling for:
- no change to the eligibility criteria for Feed-in Tariffs. The threshold should stay at 5MW and all existing technology bands, including ground-mounted, should be maintained,
- DECC to base any changes to tariffs on evidence, including a full analysis of the benefits including employment growth, tax income and alternative opportunities for local authorities to implement the Government’s green goals, and for
- support for the roll out of solar energy in the UK, so that the industry can steadily grow and get onto a trajectory whereby costs come down to the level of retail electricity (i.e. solar reaches “grid parity”).
The REA wants to support Government in a rational consideration of the feed in tariff policy. No changes should be undertaken which strand investment, undermine confidence or leave companies struggling with ongoing uncertainty.