Sun Setting on UK Solar?
In another demonstration of the hollowness of David Cameron's "Greenest Government Ever" pledge, the governments fast track review of feed-in tariffs has thrown the UK solar industry into disarray. It's proposal to cut Feed in Tariffs (FIT's) to solar PV installations after December 12th 2011 is been described by the industry as cuts that are “too deep and too quick” and could lead to bankruptcies, redundancies and litigation.
Business Green report extensively on the shambles facing the solar industry and this is a summary and links to their core content.
The problems for the Solar industry, a business success stories over the last few years, are compounded by the fact that whilst the cut off date is set for the 12th December the consultation doesn't finish until the 23rd of December so companies won't even know what rate of FIT's is likely to be agreed, a state of affairs liable to legal challenge by the solar industry.
The review is being conducted at such a pace that panels ordered from China today in anticipation of current levels of demand will not arrive in the UK until after cut off date.
Dave Sowden of the Micropower Council said
“This means companies will have ordered panels they will not be able to sell. People will be left with stranded assets and will now be calling lawyers to see if they can get out of contracts”.
Solar Companies are already planning staff layoffs and serving redundancy notices in anticipation of falling orders Howard Johns of the Cut Don't Kill campaign said
“We are happy to accept some cuts, but the government must recognise that wiping out 4,000 companies and 25,000 jobs by cutting too deeply would be an appalling waste of economic potential"
The cuts are also likely to kill installation of solar schemes in social housing projects
Dave Sowden again:
“I thought free solar schemes would be dead at 21p/kWh, but they are definitely gone at 16.8p/kWh," he said.
The government thinks these schemes get economies of scale, and there are some, but the main cost of these schemes is the finance, and you need a rate that will attract that finance.
That is not going to happen at this level, which means the scheme is even more socially regressive than it was. Now poor households will still pay for feed-in tariffs through their energy bills but, whereas before they had some access to the scheme, now there will be none."
Far from the greenest government ever this looks more like the actions of the most destructive government ever. It's reason for the review - that funds were running low, lacks credibility. This is a government happy to spend £250 million on reinstating weekly bin collections - an unnecessary but populist measure with no environmental merit but can't find the money to support an industry that has created thousands of jobs. As if that's not bad enough, the review has happened in such a shambolic and chaotic way that it may force many businesses into bankruptcy.
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James Murry's's Blog at business Green asks "What is the real reason behind government cuts" - arguing that the cuts would save around 2p a week on the average electricity bill - meanwhile in Parliament Climate Minister is accused of misleading parliament about support levels for solar energy - with respect to both other technologies and other parts of europe.
