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.”

Sources:

FT Adviser

Click Green



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