act on solar panels
Government decides to ‘cap’ funding for FiT payments
After a tough few weeks for the UK solar industry, some disappointing news has emerged. The Government has decided to effectively cap the amount of money it will allow to be spent on feed-in tariff (FiT) payments.
The Renewable Energy Association (REA) has reported that the total amount spent on FiTs during the period 2014 - 15 cannot now exceed £360 million, which is a 10% reduction on the previous estimate of £400 million.
According to the REA, this decision has been made in light of the Comprehensive Spending Review (CSR), and that the Climate Minister, Greg Barker has made this point very clear. The REA disagrees with the Government position, as it believes that tariffs should not be capped as this “goes against the whole principle of a tariff-based mechanism. The 1.6% contribution assumed from small-scale renewables had always been viewed as the estimated contribution; it was never originally intended to be a cap.”
The REA has also been lobbying this week against the Government’s opposition towards large-scale solar installations, stating that the industry has already begun responding to the feed-in tariffs, made significant investments and started to develop innovative financing approaches.
One of the main arguments the REA is forming against the Government’s decisions to cap the FiT and remove subsidy payments for large-scale renewables is the fact that all of the industry movements so far only highlight the immense success of the FiT system, in that it brings multiple benefits to UK business and has the potential to generate thousands of green jobs.
While investor confidence has taken a knock this week due to Minister Barker’s comments on utility-scale solar, knowledge that the FiT scheme is now firmly capped will dramatically undermine any assurance they had left.
The REA sets out the following four points in a bid to move forward from this point:
1. The industry must agree a level of ambition it would like to see for PV in the UK and build on the evidence base to support it.
2. The installed costs and operating costs should be remodelled to reflect today’s prices and if proven to be significantly different, a proposal is prepared and discussed with Government.
3. Industry needs to have an ongoing dialogue with Government to ensure both parties work together to ensure the future of the UK PV industry. Reviewing actual Ofgem connection figures monthly should form part of the Government / Industry dialogue.
4. A way needs to be found so that industry speaks with one voice; fragmentation will weaken its case and leave its ambition open to attack.
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