Chancellor’s dead hand on community energy schemes
George Osborne clearly intends to put a brake on community-led solar power schemes just at the point when they are cutting carbon, reducing green energy costs, creating jobs and winning public support. Unfortunately, his Treasury-led, austerity-led plan to change the rules for community-led solar power schemes is fronted by a much peddled untruth about the impact of green policies on consumers’ bills.
Instead, his plan to stifle the early registration of community energy schemes will make no difference to our bills, but chill-off would-be investors and make future schemes unworkable.
The so-called “pre-registration” stage, which the Chancellor wishes to disallow, is the opportunity for people building larger renewable projects to pre-register them to receive the Feed-in Tariff at a fixed price, and then have six months to a year to finish them.
Osborne appears to be in such a hurry to stifle green projects that his energy and climate change department hasn’t bothered with an impact assessment. Here’s what DECC’s consultation document says:
Owing to this uncertainty around the exact effect this change would have on the rates of return required by developers, DECC has not attempted to estimate the likely impact of this change on deployment and therefore on potential savings… £120m of projects pre-accredited ahead of tariff changes in October 2014 and April 2015 respectively…removing pre-accreditation could reduce the scale of this increase in deployment before future tariff reductions.
A large number of community energy schemes, supported by Repowering London and others, will be affected.
Like Cameron’s claim that “Safe fracking will cut energy bills and create wealth without ruining precious countryside,” soalr power schems like this do no overburden consumers’ bills:
- In fact, solar subsidies cost billpayers £10 per year (under one per cent of the average annual electricity and gas bill of £1,338 per year.
“Pre-accreditation,” now in Osborne’s sights, was key to the Banister House share offer, a 102KW rooftop solar scheme in Hackney based on a solid financial model and predictable income. Such projects need the period of certainty given by the pre-accreditation to agree on a contractor, finalise the financial model, put together the share offer document, open the share offer to the public, and complete the installation: all of these steps take time.
Without the pre-accreditation, new schemes will have to draw investors’ attention to the risk of a FiT change, which would increase risk and make such share schemes much less attractive.
It’s also regrettable, but no surprise since we seem to have the first climate sceptic Chancellor, that the consultation document makes no reference to the underlying purpose of the development of renewable energy in the UK, which is to rapidly develop low carbon or carbon free energy help the UK meet its binding obligations under the Climate Change Act 2008.
As Alasdair Cameron writes in The Ecologist:
What is almost as galling is that this proposal has been snuck out in the hope that no one will notice. Released, along with other changes, on the day after Parliament went on recess and a day after the Secretary of State appeared in front of the Energy and Climate Committee.