Monday, 13 February 2012

Government Proposals: ‘Armageddon’ For Solar Industry?
By Robin Whitlock

The government is planning to speed up the reduction in Feed-in Tariffs, and that means potential meltdown for the industry, the renewable energy company EcoEnvironments has claimed.

The company has warned that the tariff rate could plummet to 13.6 pence per kWh from July this year. “A reduction to a tariff as low as 13.6p in just a few months’ time is the equivalent of armageddon for the solar industry” said EcoEnvironments director David Hunt. “There is simply no way that product and installation costs will drop that much in such a short period of time to make such a low tariff rate economically viable. Together with a dramatic slashing of Fit rates in July, ministers are also proposing ongoing six-month reviews, a reduction from 25 to 20 years for the Fit rates being applicable for solar PV and the removal of RPI-linked payments.”

According to Mr Hunt, these proposals directly contravene Energy and Climate Change Minister Greg Barker’s ambition to install 22 GW of solar energy by 2020. “Yet again the government, even with a newly appointed energy secretary in Ed Davey, seem happy to watch the solar industry lurch from one crisis to the next” he said. “It is crucial that Ministers listen properly to the industry this time and ensure that the consultation process on future tariffs is a robust process rather than last time’s sham. Rather than looking to encourage consumers to embrace renewable energy technologies, you would think the Government was trying to turn people away from them.”

Hunt added that ‘the devil was in the detail’ which could mean lower prices, removal of the RPI-linked payments and reduction from 25 years to 20 years for tariffs that apply to solar PV.

Jeremy Leggett of Solar Century commented that "the new Liberal Democrat Secretary of State had an opportunity today to reassure 30,000 solar workers - but he's blown it.”. Leggett said that further cuts to tariff levels from July with the prospect of even more cuts every two months from then on would mean the PV industry facing ‘ongoing turmoil’. “It's really time for Ed Davey to do something that Chris Huhne stubbornly refused to do” Leggett added,  “Sit down with the industry, work with us, and demonstrate your commitment to saving tens of thousands of UK solar jobs. If he's serious about green growth and green jobs, that's the least that he can do.”

Barker nevertheless has informed the House of Commons that he intends to treat the solar PV sector with ‘TLC’ which he claimed stood for ‘transparency, longevity and certainty’.  However Daniel Green of HomeSun said that solar PV “will now become the exclusive plaything of the wealthy who live in the south of England.”


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Wednesday, 8 February 2012

UK Feed in Tariffs... the truth will out!
by Martyn Judd

We wrote a couple of weeks back that the UK Court of Appeal had rejected the Government's bid to repeal the legal ruling that changes to the feed in tariffs were 'legally flawed'. We had all hoped that this would reinstate the 43p rate, but reality is often stranger than fiction!

In the event, the Government simply ignored the Courts and vowed to take the matter to the Supreme Court without leave to do so. This meant that the case was unlikely to be heard for at least 8-months and, in the meantime, the feed in tariff is 21p and NOT 43p, although many unscrupulous installers are saying that it is. In response, REAL (the renewable energy insurance organisation in the UK) issued a stark warning to members that they must not tell consumers that they will get the higher rate. Even British Gas issued a letter stating the same.

Two things may happen from here:
  1. the feed in tariff consultation paper, published tomorrow (9th January), may say that the 21p rate is what is required and, as a result, the DECC will undoubtedly follow the Supreme Court route;

  2. the consultation paper will question the 21p rate cut and the DECC will have to decide where to go from here.
If DECC takes the case all the way to the Supreme Court, then all installations will be subject to the lower feed in tariff and only if the Supreme Court upholds the illegality in 8 / 9 months from now, will the higher rate be back-dated for installations made up until 3rd March. If the DECC abandons the fight, however, then chances are the higher rate will apply immediately to all installations between 12th December 2011 and 3rd March 2012.

Until we know more, we strongly recommend that consumers report installers promoting the 43p tariff to the STA or REAL:

Solar Panel Shortage As Stock Diverted to Germany
By Robin Whitlock

Solar PV installers throughout the UK could face a shortage of solar panels due to manufacturers diverting their stock to Germany, the Renewable Energy Association has warned.

The situation is partly a result of the scramble to meet increased demand in response to the December 12th deadline last year, in which many installers used up their existing stock reserves. However, with the possibility of a return to the higher Feed-in Tariff rate of 43p in response to the government defeat in the Court of Appeal, the UK market is showing signs of reviving with a sudden rush of orders following the announcement of the verdict on January 25th. Unfortunately increased demand for panels in Germany and the US has meant that an unexpectedly large amount of solar PV equipment has gone to installers elsewhere, rather than the UK. In December Germany suddenly increased its solar PV capacity by 3 GW, having introduced 4.5 GW of new solar power throughout the rest of the year. A similar influx of panels into the United States has taken place in response to the forthcoming introduction of US Government duties, according to a US solar manufacturing association. The Coalition for American Solar Manufacturing (CASM) represents over 150 US companies and has reported an annual surge in Chinese imports of around 346 percent. The combined extra delivery of panels to the US and Germany means that there is now very little left to satisfy demand from other countries around the world, including the UK.

“For the UK the present 'mini gold rush', as a result of the Government losing their Appeal, has come at the wrong time” explained Ray Noble, solar PV specialist at the Renewable Energy Association. “not only because of the USA/Chinese product demand, but the fact that Germany installed 3GW in December - after having only installed 4.5GW in the previous 11 months. The Solar Industry was expecting a slow start in 2012 and thought they had enough stock to meet demand and took a long break over Xmas, however they had not allowed for the unexpected 3GW going in Germany which cleaned out the Warehouses of the top brand solar companies.” Mr Noble went on to state that many of the major producers, including the Chinese, will only be able to replenish their stocks by early March, after the 3rd March tariff change deadline.


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