Solar industry in shock
The solar PV (photovoltaic) industry was braced for bad news but the announcement today was shocking. If today’s new Tariff rates go through nothing above 50kW is commercially viable, which means no particularly meaningful school, local authority, community, co-operative, commercial or farming sector schemes. The solar energy sector had grown in less than a year from 3,000 to 10,000 jobs with an REA survey predicting 17,000 jobs by the end of this year – precious green growth that should have been seized with both hands.
The government have fundamentally failed to understand how the industry works. Larger schemes are needed for purchasing power, to drive supply chains and cost reductions for the benefit of all. And this had demonstrably worked well bringing costs down around 20% in a single year. No economy has built a solar industry based on a very modest set of ambitions for the domestic sector. And no new manufacturers will be interested in locating in the UK with such a suppressed domestic market. And it must be said, 50kW isn’t even large.
Opting out of the fastest growing energy generation technology in the world, the technology with the fastest dropping prices and which, in capacity terms, was the biggest single renewable installed across Europe last year is a huge mistake in industrial policy terms.
Most frustrating of all the government acknowledge that the costs of solar have come down surprisingly fast. That should have meant a positive rethink of the potential of this incredibly popular and durable technology. Instead the UK is now being left far behind the major EU economies – both Germany and Italy are aiming for close to 10% of their electricity from solar by 2020.
REA analysis lays bare the bizarre assumptions about fossil fuel prices on which the overall ambition of the UK FIT scheme are based. No serious commentator would accept their fossil fuel price trajectory. The result is the value of investing in alternatives like solar has been seriously underestimated.
The industry has no intention of accepting this major strategic mistake on the part of the Coalition Government. Solar is too important a technology to marginalise. It could readily supply a third of our power in the UK – technically much more. REA achieved the Feed In Tariff measure working with diverse groups including social housing providers, farmers, NGOs and the Unions. These groups understand the value of wholeheartedly embracing new technologies with all the economic, employment, environmental and energy security benefits they bring. And they understand technologies like solar put power directly in the hands of energy users. That’s exactly the kind of energy revolution we need. We look forward to working with the Unions again to ensure the wisdom of the crowd prevails.