From the TUC

A government that won’t back the solar power industry doesn’t have a growth strategy

18 Mar 2011, by in Cuts Watch

Next week, the government will launch its growth strategy. Today, the Energy Minister may have all but killed off thousands of jobs in the UK’s domestic solar power industry. It’s one of the best new growth industries we have. Before the announcement of the review, the Renewable Energy Association (REA) estimated that 17,000 new solar jobs would be created by the end of 2011. Not now it won’t. By delaying the deployment of new generation capacity the Government risks running Britain into the energy gap. Already the UK is forecast to have one of the lowest generation reserves in Europe. These are the details. 

The proposals published today reduce the tariff schemes for roof-mounted schemes of over 50kW by 39 – 49%, making them totally unviable.  Many of these are community and SME projects with tremendous popular support. The tariff for standalone schemes has been reduced by over 70%, with no transition arrangements. Energy Minister Greg Barker proposes:

  • 19p/kWh for 50kW to 150kW
  • 15p/kWh for 150kW to 250kW
  • 8.5p/kWh for 250kW to 5MW and stand-alone installations.

These compare with the tariffs that would otherwise have applied from 1 April:

  • 32.9p/kWh for 10kw to 100kw
  • 30.7/kWh for 100kw to 5MW and stand-alone installations

 Today’s decision to halve feed-in tariffs is rightly greeted with dismay by the industry. Units costs have fallen steeply in the UK solar industry as it has grown under the feed in tariff scheme introduced in April 2010. As the REA points out, “Critical size is needed to achieve price reductions, and that had been happening.” Solar PV is the dominant renewable installed across Europe last year.  It’s the fastest growing technology in the world. 

Howard Johns, Chairman of the Solar Trade Association said: “The solar industry is one of the genuine good news stories in the UK today, providing both jobs, a new green industry and importantly some hope.  Crushing it at this time is a serious strategic mistake but inevitable when it appears to be Treasury, not DECC, dictating energy policy”. 

Although three Government departments are coordinating the Green Economy Council, none of them hinted at this decis8ion when the Council first met in February. The draft Green Economy Roadmap says: “We remain committed to meeting the 15% target of energy from renewables by 2020 set in the 2009 Renewable Energy Directive.  Our approach will remain one of managed markets, not direct government intervention.” What is this decision then: Managed market or Government intervention? Mismanaged market might fit the bill. 

Gaynor Hartnell, Chief Executive of the Renewable Energy Association, said, “Pulling the rug out from under the feet of those that have ventured into this market was precisely the wrong response. The UK will return to the solar slow-lane.  It’s as good as a retrospective change and that does untold damage to investor confidence.  It’s not acceptable and we will fight it.”