These are challenging times for the UKs renewable energy industry.
It finds itself fighting for its life under a barrage of government cuts.
Perhaps David Cameron just has a thing against solar panels stuck on the roofs of houses. It would neatly explain away the decision to cut subsidy funding by 87%, a scheme which has led to tens of thousands of people installing a source of renewable energy on their homes in recent years.
In fact the UK has the enviable title of country with most solar power production in Europe – almost at the 2020 target. The 625,000 homes which installed them generate twice as much energy as Drax, England’s largest power station.
The UKs plan to effectively shut down this renewables scheme came three days after the US announced a $1bn programme that would increase the number of homes with solar panels. Maybe this is what the Tories meant when they talked about a ‘new solar revolution’ after they won the election. Details dear boy, details.
The Government has estimated 958,000 homes, schools and communities which would likely have taken up the option of installing solar panels will not now do so.
The official reason is that the subsidies were just too expensive. Solar power is relatively expensive. When introduced feed-in tariffs were a generous 43p pKh. The coalition government agreed a cap for renewables which was meant to hit £7.6bn in 2030 but like all good government plans this is now predicted to reach £9.1bn by then. Hence the Treasury cuts – the feed-in tariff is now 12.9p pKh and the plans are to reduce that further to 1.63p pKh. “We are taking urgent action to get a grip of this overspend and protect hardworking bill payers. Our support has driven down the cost of renewable energy significantly,” said a Decc spokeswoman. “As costs continue to fall and we move towards sustainable electricity investment, it becomes easier for parts of the renewables industry to survive without subsidies.”
If you think the Prime Minister is bang on and argue against the merits of supporting others to install solar panels – consider this: feed-in tariffs add just £7 to the average household bill which is estimated at £1200. And this: all this time the UK government is hell bent on the £25bn Hinkley C project even though there is still no better idea on how to get rid of radioactive waste other than burying it a mile underground. (In a place far far away from Westminster.)
There is also the benefit of jobs in the green industry. Just as President Obama said twice as many people are now employed in the American solar power industry than in the coal industry, in the UK the Renewable Energy Association says employment has been increasing nine times faster here than in any other section of the economy. British firms which have been driving technological advances would be left to wither as their US competitors power ahead. Colin Calder of PassivSystems told The Guardian the cut will “destroy an entire industry overnight, putting thousands of jobs and many businesses at risk.”
There are arguments which support a cut in the feed-in tariff but there is no reason why a more measured approach would not be more appropriate. It would give the industry time to stand on its own two feet, not cut it dead before it reaches anywhere near its prime. It would also mean there wouldn’t be a stampede of people booking solar panel installers before the scheme is brought to an end in January.
The other concern is that there is no green alternative that the government is pursuing. By its own admissions this strategy will lead to more than 6GW of anticipated renewables capacity and 1.59MT of carbon dioxide savings not now being realised by 2020.
With Friends of the Earth calling the cuts ‘absurd’, David Cameron’s credibility on tackling climate change is being questioned at a particularly inopportune time: the UN climate change talks are set to begin in Paris in a matter of weeks. If the Prime Minister walks into Le Bougret on November 30 knowing that in little over a month his government will be blamed for destroying one of the most successful renewables schemes in Europe, he’d better have something good up his sleeve. (Or just run run run…)