Earlier this afternoon the Department of Energy and Climate Change (DECC) announced the results of the latest consultation on feed-in tariffs. This news has been much anticipated by the UK solar industry, which has seen decreased installation figures since the last cuts were introduced. Many industry players have contacted Solar Power Portal with their comments on today’s announcement; a selection of these thoughts can be read below.
Friends of the Earth’s Executive Director, Andy Atkins, who wrote to DECC earlier this week to ask for more certainty in the UK solar sector said: “After a year and a half of crippling uncertainty, the sun is starting to shine again on the solar industry.
“Greg Barker’s 2020 vision will allow solar firms to get back on their feet, protect jobs and plan for the future – but to avoid more fiascos any mechanism for setting subsidy payments must be managed independently of Government.
“The Energy Bill is a once-in-a-generation opportunity to create jobs and tackle high fuel bills by switching our electricity supplies to clean British energy – but current plans will leave the nation hooked on costly gas and risky nuclear power.
“Developing the nation’s huge renewable energy potential will help drive us out of recession – the Government must make it easier for communities, schools and hospitals to plug into clean power.”
Reza Shaybani, the Chairman of the British Photovoltaic Association (BPVA) also welcomed the news, stating it will give clear directions to the industry as well as a clear message that there is a bright future UK solar: “The industry and Government will work even closer now making sure the future is better than the past. Seeing solar PV as an important part of the UK’s energy mix in the Renewable Energy Roadmap is a major step forward and in the right direction.”
Meanwhile Brian Smithers, the Business Development Director at Rexel said: “We are pleased to see Government’s announcement on the FiT this afternoon, it confirms the UK Government’s long-term commitment to the investment in the solar market. The FiT was designed to kick-start the solar industry with great success. Early adopters of new technology were able to take advantage of a higher rate and it is now up to us, the industry, to show the value of solar long-term. Education is key. The industry needs to demonstrate that the UK has a bright future in renewables and the announcement today reinforces this.”
Commenting on Government’s decision to discuss planned changes with industry before making rash decision, Andy Boroughs of Organic Energy, said: “What was always needed was for the Government to properly consult with the solar sector and develop a plan for the future. The reduction in the tariff today was expected and we welcome the delay in the deadline to August 1.”
However, Boroughs also pointed out that there is still uncertainty for consumers when they consider what return they will get on their investment with plans to link the future reduction to uptake in installations.
“It is disappointing to see the FiT lifetime reduced to 20 years, but I accept that this brings it in line with other incentives. I believe the inclusion of solar power in the UK Renewable Energy Roadmap is the most important aspect of Barker's announcement today. I criticised the report last year for failing to include the technology as one of the key renewable energy sources with the greatest potential to reduce the UK's dependence on gas and oil,” he explained.
Andrew Lee, General Manager, Solar Commercial Sales Division, Sharp Solar said: “We welcome the government’s decision to work towards creating a more stable feed-in tariff for the solar industry which helps to bring much needed certainty to the sector. This is a chance for the industry as whole to turn a corner and work towards driving growth in the UK. The 16p rate still offers opportunities for both investors and homeowners to take advantage of a cost-effective form of renewable energy while also bringing stability to the market.
“We will continue to maintain a dialogue with the government to continue moving solar forward and instil confidence in the sector. It is important to realise that the solar industry can still play a pivotal role and be part of the low carbon economy in the UK, and we are pleased that the government recognises this and is working to create a better, more effective tariff system.”
Juliet Davenport, CEO and founder of Good Energy, said: “Good Energy supports a large number of social housing projects receiving the feed-in tariff so it’s good that their rates will now be better than expected. We’re also pleased to hear Greg Barker confirm that solar power has a vital role to play in the UK’s renewable energy mix, and that the government is now seeking to provide a clearer path forward. What is now crucial is that government gets the Renewables Obligation for larger scale solar right as well. Solar has a valuable part to play in a balanced renewable energy portfolio, because the sun is often shining when the wind isn't blowing, and vice-versa.”
Jeremy Leggett, Chairman of Solarcentury said: “Though investor confidence will remain uncertain given the proposed three-monthly degressions, the majority of the government’s policies may herald a new seriousness of intent on solar, and indicate that a meaningful solar industrial policy is now a real prospect for the UK. But, it is our responsibility to continue to challenge the government on solar progress until the day the technology becomes a key part of our energy mix.
“Solarcentury looks forward to helping fine-tune vital key points of detail from today’s announcement, and playing its part in charting the roadmap to 22GW of solar photovoltaics by 2020. We fully hope that, with collaboration on the scale the minister expects, industry, government and consumers will together invest to exceed 22 GW. We can all make the UK a serious player within the world-changing solar industry that McKinsey and others envisage by the end of the decade. Investors, be they commercial or individual, can potentially be excited about the opportunities in the next years.”
David Hunt, a director with leading renewable energy company Eco Environments, said: “Yet again the Government stands accused of giving with one hand only to take away with the other.
“We are pleased that Ministers have listened to the deluge of complaints from the solar industry about the scale and speed of the cuts proposed in their consultation document earlier this year.
“But we are also disappointed that the Government still seems hell-bent on making life very difficult for the solar industry and the tens of thousands of jobs dependent on it as well as for consumers who are weighing up the pros and cons of investing in solar PV.
“While the return on investment remains attractive at around 6 percent, by reducing the FiT lifetime by five years consumers will earn approximately £20,000 less than they would have done if the 25 year term had been left in place. This is the sting in the tail that the industry and the consumer could have done without at a time when the market remains extremely fragile.”
The Solar Trade Association (STA) also said it welcomes many aspects of DECC's new feed-in tariff cost control framework, yet the Association remains concerned about the state of the UK solar market in the recession. Chief Executive Paul Barwell said: “The [the model] now provides the industry with the security of guaranteed tariffs to 2015 allowing it to build for the future. The STA is pleased to have won its ask for quarterly reviews with more responsiveness to market size, and less emphasis on automatic tariff cuts.”
However, echoing other industry comments Barwell says the STA also remains worried over the current low installation figures: “We remain very concerned that the market has stalled, and the recession certainly hasn't helped. However, today's announcement means we can now be confident that even when tariffs are adjusted on August 1, solar will still offer attractive returns to consumers – certainly when compared to other investments currently available.
“It is vital consumers understand tariffs can come down because the costs of solar have come down – there is a faulty perception out there that cuts mean solar doesn't pay. In fact, solar offers similar returns today as when the FIT scheme began because the industry has been so successful at reducing technology and installation costs.”
STA Chairman Alan Aldridge concluded: “The fact is solar is one of the best investments in town for householders. We need Government now to work with us in this very difficult economic climate to get the message out that this tremendous technology is a great investment.”