Exclusive: Greg Barker – Certainty for feed-in tariffs

From panels on roofs glinting in the sun, to churning turbines in streams and brooks, home-grown local energy generation is really flourishing across the UK, supplying thousands of our homes and businesses with clean green power.

This revolution in small-scale green energy has been driven forward thanks to support from the Government’s feed-in tariff (FiTs) scheme. FiTs are available for a range of technologies including anaerobic digestion, micro CHP, wind turbines and hydro power. But almost 99 percent of uptake under FiTs has been for solar panel kit and it is easy to see why. Solar is reliable, intuitive, easy to install and a great solution for people worried about rising electricity bills.

As the cost of installation falls, the number of panels on roofs grows, and solar is now common place across the nation. It’s fantastic to see this type of renewable energy starting to reach its potential.

As the solar industry is well aware, I’ve had to take some difficult steps over the past year or so to ensure that we stay within our budget for FiTs. This is due to rapid uptake, which in itself was a result of dramatic reductions in the costs of solar PV. For instance, in April 2010 a typical 2.6kW installation was estimated to cost £13,000 – incredibly, it now costs less than half of that. In extremely challenging economic times we must ensure that we don’t offer excessive top rates of return.

I strongly stand by the changes we have introduced; they are necessary to improve the scheme and put solar on a path to a sustainable future. Solar PV continues to provide a very good return on investment for households, offering 6 percent or more for those with a suitable roof. The clear, predictable path for tariffs we have introduced will allow businesses and households to invest with confidence, no matter when their panels are to be installed.

You just have to look at the figures to see that there is still a huge national appetite for solar. Almost 110MW has been installed since April 1, with a total of over 170MW installed since new tariffs were introduced on March 3. Weekly installations are up 50 percent on this time last year, and nearly 3,500 solar installations were installed in the week ending July 1. These are hugely encouraging numbers, clearly underlining that solar continues to thrive.

Recent announcements from the industry are further testament to the excellent health of solar in the UK. Proposals for centres of excellence in manufacturing, research, innovation, measurement and training are popping up on a regular basis and I hope they will become a reality within the next year.

I was also interested to hear that recent market changes in Japan have led to increased output at Sharp Solar’s manufacturing plant in Wrexham. Some of the solar panels are also being exported to Japan, Sharp’s home country. This really highlights the attractiveness of the UK as a home for manufacturing investment as well as innovation.

Moves like this not only sustain jobs in the solar sector but also bring new opportunities and innovation, and show a huge vote of confidence in the outlook for the UK solar industry.

With the cost of panels and inverters coming down significantly, I now want to work on bringing the price of installation down. That is why I have set up a cost reduction task force with the industry to help do just that. We will also update our vision for renewables later this year to reflect solar’s increasingly important role in meeting our renewables targets.

But FiTs aren’t just about solar – there’s support out there for all kinds of other small-scale renewables for our homes and businesses. I want to see many more households getting stuck in, and businesses taking the lead in the growing global market for green energy.

When thinking about small-scale renewables, it’s important to remember that not all technologies under FiTs are alike. Some, like hydro schemes, have long lead in times to get projects from the drawing board and into rivers. That’s why from December 1 this year new projects over 50kW in size will be able to benefit from preliminary accreditation including a tariff guarantee, so investors can make decisions with confidence and be sure of their rate of return even before their projects are up and running.

I want to see more communities explore the benefits that clean, green local energy has to offer. That’s why I want to ensure community scale projects are able to properly benefit from FiTs. Local energy generation is a key part of our energy future and local communities, with their drive and innovation, must be at the very heart of this revolution. The benefits of producing energy at a local level are clear. Not only can green energy help cut carbon and help us meet our renewables targets, it can also help cut our dependence on expensive, imported fossil fuels and improve our security of supply.

From December 1, community PV schemes and school based projects will be exempt from the current energy efficiency requirement, to spur on these type of projects. This recognises the hard to treat nature of community buildings often involved in such schemes, and the educational benefits that they can bring.

Alongside these changes we are also changing some of the tariffs for new non solar installations under FiTs from December 1 to ensure, like solar, we are not offering over the top rates of return, but at the same time ensuring it is still attractive to invest.  We are also introducing a way to reduce tariffs over time, providing long term certainty for householders and businesses.

With FiTs installation numbers up, promising developments within the industry and our comprehensive review of FITs now complete, we are firmly on the right track. I see an exciting and sustainable future for solar and other small scale renewables in the UK. One where the Government and industry work together to ensure these crucial green technologies continue to make a real difference.

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