The Environmental Audit and the Energy Climate Change Committees jointly conducted an inquiry on solar PV feed-in tariff rates today in Westminster. The purpose of the inquiry is to examine the factors Government should consider when setting the FiT rate, including the impact on energy bills, ‘green jobs’, take-up of other renewables and energy-saving behaviours. The Committees are also evaluating the way in which the Government has managed the feed-in tariff scheme and its impact to date.
In this, the first of two such inquiries, members initially heard from a panel of solar industry professionals consisting of Daniel Green, Chief Executive Officer, Homesun; Howard Johns, Chariman, Solar Trade Association; Peter Capener, Chair, Bath and West Community Energy; and Jeremy Leggett, Chairman, Solarcentury.
Members of the industry argued eloquently and robustly about the “catastrophic” impact that the proposed cuts will have on the industry, covering a whole range of topics close to the industry’s heart. However, today’s evidence session was dominated by the industry’s three main areas of concern regarding the proposals.
Firstly, a fourth review of solar technology in less than a year would not only undermine investor confidence in solar but in all renewable investment in Britain. Daniel Green noted that, “investment likes clarity and certainty”, whilst Jeremy Leggett asserted that, “this isn’t about solar; this is about renewables and investor confidence.”
Secondly, linking the feed-in tariff rate to EPC would, by DECC’s own admission, kill the industry. Howard Johns explained that, “the industry will totally collapse because it will be cut from 500MW down to 10MW in just one year.”
And finally, the disparity between the implementation of the FiT rate change and the consultation period leaves the industry in an impossible situation where it cannot conduct business. Howard Johns argued that the proposals, as they exist currently, will lead to “an industry hiatus from December 12 to an unknown time.”
Daniel Green summed up the industry’s feelings best when he stated that, “21p is difficult but doable; the other measures proposed make it impossible.”
The second panel of witnesses, including Greg Barker, Minister of State for Climate Change, Moira Wallace OBE, Permanent Secretary, DECC and Simon Virley, Director General, DECC, set out to defend the proposals to ministers.
Mr Barker proceeded to reiterate the point that the FiT review had to be implemented now in order to stay within the allocated budget and protect the future of the scheme, stating: “The emergency review of the solar sector has been regrettable – we chose to protect the future of the feed-in tariff scheme.”
Mr Barker also restated his belief that the cuts were a direct consequence of poor planning by the previous Government who implemented the scheme. Barker accused the previous Government of completely failing to anticipate the demand for large-scale solar and the lack of “a more flexible scheme of digression.”
Mr Barker also admitted that DECC had “consistently underestimated the uptake of solar PV” and the explosive growth of the market meant that leaving the current FiT rate in place until April would be “catastrophic”.
The details outlined above will leave the industry frustrated, but we can take a degree of comfort in the fact that the industry managed to voice its legitimate concerns to ministers as the solar industry is thrust once more into the political limelight.
