This afternoon the Minister of State for Energy and Climate Change Greg Barker addressed the UK solar industry at the biggest industry gathering in the country. Speaking to an audience of around 1,300 at the Solar Power UK 2011 Conference & Exhibition in Birmingham, the Minister revealed his plans for the future of solar feed-in tariffs.
Despite initial reports that he would reveal the new FiT rates for solar, Barker did not give any indication of when the new rates would be announced, or what they would be. Instead, he talked about his plans to commit to the solar industry in order to drive a successful low-carbon economy.
“I’m personally committed to ensuring that your industry can prosper in the longer term, sustaining green jobs at a critical time for our economy, jobs that people can build a career on,” he explained.
“Over 100,000 homes now generate some of their energy from their own renewable power stations. And to date solar has been by far the most popular technology with consumers. It’s easy to see why: it’s simple, accessible, reliable and fits discreetly into homes and communities.”
However, while Barker was keen to let the audience know that he is an advocate of solar technology, he made it clear that the future of feed-in tariffs must be carefully considered, and that solar industry growth and resulting profit cannot continue in the manner it is currently progressing.
“Much of the growth in PV has been as much about consumers accessing the Government-backed tariff as accessing the technology. High net worth individuals chasing returns which are now easily reaching double figures at a time when interest rates for savers have collapsed to an historic low. That can’t be right. And I know responsible voices in the industry have been worried about this for some time,” he said.
“The Green Economy does not exist in a bubble. Yet the subsidised returns we have seen on solar PV investments – funded from consumer energy bills – are unsustainable at a time when National Savings have pulled their index linked bonds, interest on savings accounts has plummeted and the stock market has dropped.”
Yet while it was made clear that a cut needed to take place, no details were revealed on when the rates would be announced, or indeed what they might be. When directly asked about the rumours of 9p and 20p rates recently reported in press, the Minister was said he was unable to confirm or deny whether these figures have come from Whitehall, responding only to say that the new rates would be announced in the next few days.
Taking the experience he has gathered from other, more mature, European solar industries, the Minister also highlighted the possibility of a ‘boom and bust’ scenario. In order to prevent this, it was made clear that Government would consult on how to react to market developments.
“We will consult later in the year on how we respond to market changes and assess PV costs and take up on a regular basis, and revise our tariffs accordingly. Industry is critical to this process. We want to work with you to agree the future path of tariff reduction, take politics out of the sector and deliver what I believe the industry needs and what the last Administration’s scheme failed to deliver: T.L.C. – not tender loving care, but transparency, longevity and certainty,” he explained.
In terms of other announcements, Barker also explained that there would be new regulations for those installing new solar PV from 2012. UK homeowners will no longer have access to feed-in tariffs if their home is not considered energy efficient.
“I can announce today that we will be bringing forward proposals to ensure that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards.
It cannot be right to encourage consumers to rush to install what are still expensive electricity generating systems in their homes before they have thoroughly explored all of the sensible options for reducing their energy consumption first,” he said.
Press were also told that Government would consult on a possible two-tier feed-in tariff scheme for social housing and community projects in order to combat the effects of the fast-track review, although again, no more details were provided.
Towards the end of the speech the Minister revealed plans for renewable heat, announcing that the full RHI would be implemented next month. Barker was keen to ensure that other renewable technologies also take off in the UK in order to create a more even green energy mix.
“As part of the new effort to drive a whole-house approach, solar thermal will have an important role to play alongside PV and other innovative technologies. I am keen to see a much greater integration of solar thermal and PV offerings in the marketplace – providing consumers with the best advice and the right technologies for their situation.”
Industry’s reaction to this was varied, with some agreeing that other green technologies should up their game, while others expressed anger that PV has literally become a victim of its own success.
Barker closed his speech by outlining that he is keen to drive a successful solar future, which can only be achieved by working together with industry. Despite not revealing anything of the new feed-in tariff policy, the Minister did give industry more of an idea of where the future for solar in the UK lies.
“Let me be absolutely clear, I haven’t come here to kill the tariff scheme, I want to fix it, enhance it and put the whole industry on a sustainable, credible economic path to a bright and exciting future,” he concluded.
You can watch the Minister's speech here.