All the reaction: Renewables sector left reeling after Government's latest attack

by Search Gate staff. Published Thu 27 Aug 2015 14:09, Last updated: 2015-08-27
Green energy industry comes under attack from Government policy
Green energy industry comes under attack from Government policy

The UK renewable energy industry has reacted with shock and anger at the latest attack by the Conservative Government to slash subsidy support through the Feed-in Tariff scheme.

Scottish Renewables described how the removal of support for some wind projects and a reduction of up to 86% for solar would “severely curtail” development.

Cuts to the Feed-in Tariff scheme, through which small renewables are funded, could also spell the end for much of Scotland’s fragile hydro sector.

As part of a comprehensive review of the FiT scheme announced this morning, the Department of Energy and Climate Change has announced the cuts in addition to a number of other proposals which will limit growth in small-scale green energy projects – and potentially close the scheme to new projects in early 2017.

Joss Blamire, Senior Policy Manager at Scottish Renewables, which represents more than 300 green energy businesses, said: “The proposals in the Comprehensive Feed-in Tariff Review are, quite simply, terrible news for homeowners, businesses, communities and those local authorities which have plans in place to develop renewable energy schemes.

“The levels of reduction in support announced today will severely curtail development of small-scale onshore wind and solar projects and endanger jobs and investments across the country.

“The cuts could also spell the end for much of the hydro industry, which has enjoyed a recent renaissance but relies more heavily on Government support because of the length of time taken to develop projects and the sector’s high capital costs.”

Mr Blamire told how renewables developed under the Feed-in Tariff scheme have brought multiple benefits – all of which are now in jeopardy.

He added: “Support for small-scale renewable energy has enabled the public to share in the recent success of the green energy industry, saving on their energy bills and doing their bit to mitigate carbon emissions from our power sector.

“FiT-scale renewables have allowed both rural and urban businesses to grow by taking control of their own energy use and insulating them from the volatile, uncertain costs of imported fossil fuels. Reducing that support so far, and so quickly, could be hugely damaging.”

Good Energy is one of the largest feed-in-tariff administrators in the country, processing payments for the electricity produced by nearly 100,000 homes and business across the UK.

Juliet Davenport, chief executive of Good Energy, said: "The proposed cuts mean that installing solar panels at home will no longer be attractive to British families."

"The Feed in Tariff has transformed the way the UK generates its power over the last 3 years, with over 22% of the UK's power coming from renewables in the early part of 2015, and over 700,000 homes generating their own power. It's helped to take us away from the old-fashioned fossil fuel companies to a cleaner, local, more democratic system."

"We hope the Government will re-think the value that renewables bring to the market, if you do the calculations you'll see that solar actually brings down wholesale prices of energy. China and Germany are leading the way in investing in renewables, and we hope that the recent announcements by Government don't see the UK fall behind again."

"It's also going to put the brakes on innovation in the battery storage market, a game-changing technology which would enable households to store their own electricity."

Frans van den Heuvel, CEO at leading UK installer Solarcentury, said: “Today’s proposed solar FIT cuts announced by DECC add to the calculated turmoil that the new Government has unleashed on the solar market since the election.

“In little more than three months, the Conservative Government has literally turned upside down the certainties which had characterised the UK renewables market and the cross-party consensus that underpinned it.

“If the consultation is enacted, we can expect to see a wholesale collapse in solar take up by homeowners and businesses – just at a point in time when most other countries are escalating their solar deployment having seen the dramatic impact the technology can make in tackling climate change.

“So much for Amber Rudd's promised ‘solar revolution’ and the former Conservative energy Minister's pledge to put ‘rocket-boosters’ under the non-domestic roof sector.

“The rushed announcement of retroactive changes to solar support schemes, including the Renewables Obligation, since the election have been shocking and damaging, all the more so, since the Conservative Party's Election Manifesto was silent on these issues.

“Today's threat to close the feed-in tariff scheme altogether from 1st January 2017 trumps even all of those. At least our colleagues in the onshore wind industry knew what was coming from the clear Manifesto commitment to end support for onshore wind. But the truth is that remarkably, solar, by far the country’s most popular renewable technology, is being treated even worse than onshore wind.”

Head of Policy and External Affairs at the REA, James Court, said: “Rooftop solar has to been seen as one of the key technologies for a decarbonised future, with consumers and businesses also gaining control over the centralised energy market, this is a phenomenally damaging and short sighted decision which sets back this goal significantly and will lead to higher costs in the medium to long term.

“87% is beyond the worst fears of many of our members, it is hard to see how homeowners or businesses could see solar as an attractive option for the foreseeable future following these disproportionate cuts.

“Solar has come down in cost so dramatically in the past five years and has grid parity in its sights, the industry feels like it’s having it’s legs cut away metres from the finishing line.”

The UK Government is proposing to reduce support across technologies and setting a cap on the number of schemes supported each quarter. But these limits will be hard to understand in advance, so increase the risk for anyone applying for support. RenewableUK is warning that complex rules would in the long term scare away many of the people who could most benefit from this scheme, and in the short term create market chaos.

The programme is designed to promote small-scale renewables through ensuring householders, communities or businesses are paid a set tariff by electricity suppliers for the power their projects generate. This flagship support mechanism has been a lifeline to these farmers, as well as householders, rural businesses and community groups wanting to cut energy costs and play their part in cutting carbon emission.

The market has been supplied mainly by UK turbine manufacturers who supply both the UK and export markets. For every turbine sold at home, one is exported. A strong domestic market is vital for these companies, but further shrinking of this market will hurt UK manufacturing and encourage relocation abroad.

RenewableUK’s Deputy Chief Executive, Maf Smith, said: “It’s important that we all work to manage costs, but it looks as if the long term vision has been lost.

“The small and medium wind sectors are at one with Government in their desire to cut carbon at lowest cost to the consumer. But they can’t do this when Government makes sudden and damaging changes which undermine investment.

“What we needed in this Review was a clear vision for how we get to a point where cost effective, small-scale renewables are common-place, with all homes and businesses able to be part of a productive, vibrant low carbon economy. This Review is not about how we build that prosperous future but simply about short term politics and accounting.”

RenewableUK is also expressing concern about the speed at which Government is making these changes. Maf Smith continued: “We’re also concerned about the timing of this review. Only last month Government consulted on ending pre-accreditation.

“Now they are consulting on reducing tariff rates, and capping deployment. But such significant changes can’t be introduced within the proposed January 2017 deadline without hurting many businesses and individuals who have been investing in new projects. The next four months will turn the British energy market into a wild-west market with energy consumers stuck in the middle.”

Mike Landy, Head of Policy at the Solar Trade Association commented: “The proposals put forward by the Government today, which will now undergo a period of consultation, would be hugely damaging for the UK solar industry and we are now consulting quickly with our member companies as to how to respond.”

“We will provide a detailed response shortly, once we have considered the proposals in more detail. However, we regret that proposals to suddenly cut Tariffs combined with the threat of closure of the scheme next January will spark a massive market rush.

“This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.”

Friends of the Earth energy campaigner Alasdair Cameron said: “From California to China, the world is reaping the benefits of a solar revolution, yet incredibly in the UK David Cameron is actually trying to shut rooftop solar down.

“These absurd solar cuts will send UK energy policy massively in the wrong direction and prevent almost a million homes, schools and hospitals from plugging in to clean, renewable energy.

“Of course the feed-in tariff should fall as solar becomes cheaper, but the government clearly plans to remove support entirely. This is politically-motivated, and will take away power from people and hand it back to big energy firms.

“Instead of championing fossil fuels, the Government should focus on developing the UK’s huge renewable energy potential.

“Policies like this will further undermine David Cameron’s credibility on climate change. World leaders meeting in Paris later this year will have every right to call him a hypocrite.”

Dr Doug Parr, Greenpeace Policy Director, commented: "The Government cannot pretend cuts to subsidies for the nascent solar industry are necessary to save families money whilst throwing much more money at propping up polluting coal stations.

“The timing couldn't be worse as the young and potentially booming solar industry is on track to go subsidy free but if these cuts happen, it will be too sudden, too soon and too dramatic. It is highly likely to irrevocably damage the domestic solar industry.

“The Treasury needs to get out of its 20th century mind set about backing coal and instead support new technologies and the sector that will provide jobs, lower emissions and create a secure future."

Philip Sellwood, Chief Executive, Energy Saving Trust, said: “Our calculations show that, given current prices for this technology, under the new proposed Feed-in Tariff rate a standard solar PV installation is no longer cost effective for householders. Based on the new rate, the price of a typical solar panel installation will need to fall by over £800 for an investment in this technology to be cost-neutral for a typical home.

“We are as keen as the government to see solar panels being financially viable for homes without the need for the subsidy. But these cuts come too soon and are too sharp and there is little incentive now for the consumer.

“The Feed-in Tariff has been extremely successful in driving the uptake of solar panels in the UK which has helped PV prices to fall by nearly 70 per cent over the last five years.

“There has been a real solar revolution with more than half a million homes fitted with panels. These homes have lower electricity bills and emit less carbon and receive regular Feed-in-Tariff payments that help pay back the investment in the panels.

“We are also concerned about the impact on business. In the UK we have around 3,000 accredited businesses installing Solar PV – all will now be unsure of the future of solar following this damaging blow. Reducing the rate so drastically leaves installers little time to diversify and to stay afloat during this period of uncertainty.”

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Comments about All the reaction: Renewables sector left reeling after Government's latest attack

Great news. We have been told that Green power is cheaper than coal. Why subsidise an efficient industry?
Lawrie, Wingham, Australia around 1 week, 2 days ago
LOL Do a search on CLICKGREEN for renewable energy costs, many articles on how RE is cheaper than oil, coal, so no subsidies needed!
john, US around 1 week, 3 days ago
This is brilliant news. All these subsidies should have been stopped long ago.
John Benton, Edinburgh around 1 week, 4 days ago

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