Solar industry urges Cameron to halt July cuts

High-level executives from over 400 solar companies have written to Prime Minister David Cameron urging him to halt the planned cut to solar subsidies in July.

The coalition of solar executives believes that the Prime Minister should intervene personally to “freeze cuts to feed-in tariffs before the sun sets on the solar industry for good.”

In the letter, Howard Johns, spokesperson for the Cut Don’t Kill Campaign, challenges the depth and speed of “significant” March 3 FiT cuts, which saw rates slashed by more than 50 percent.

The letter moves on to criticise the Department of Energy and Climate Change’s (DECC) handling of the cut, stating: “DECC’s track-record since October includes one illegal cut, two appeals to the courts, three consultations and two feed-in tariff scheme changes following shortened consultations.”

The letter warns that the combined effect of Governmental mishandling and swingeing cuts has undermined public confidence. The latest installation figures for the solar industry show that, since the lower FiT rate was introduced, the industry has stalled. “Panel installation rates were roughly half in April this year to that of a year ago.  Indeed, the rate has nose-dived to such an extent that it would now take another 160 years to deliver the amount of solar energy that the Government claims it wants to generate by 2020.”

As a result of the apparent market freefall, the signatories urge the Prime Minister “in the strongest possible terms to intervene and freeze and further cuts.”

The letter outlines two reasons why the planned cuts need to abandoned:

“First, it is more important than ever to persuade people that Solar represents good value for money. A further sudden change to the tariff will simply increase the sense that the days of valuable returns are over.

“Second, our industry needs a chance to get back on its feet. 93 percent of UK Solar installation companies are now worried about their future.  Over 6,000 people in our sector have lost their jobs since last summer.  43 percent of solar companies have reported that they will make redundancies in coming months.”

It also reminds Cameron of the pledge he made during the Clean Energy Ministerial that Government would deliver on its renewable energy commitments. The Government has a very clear ambition of generating 22 GWp of solar by 2020, which the coalition of concerned solar companies believes is impossible if further cuts are implemented.

The letter has been signed by many high-profile solar companies including, Solarcentury, SMA Solar and Yingli. The full transcript can be read below:

 

 

 

Dear Prime Minister,

It is necessary to freeze cuts to feed in tariffs before the sun sets on the solar industry for good.

Solar electricity should be a great British success story.  Since April 2010, over 300,000 households have installed solar panels. By the end of 2011, the industry constituted 4,000 companies and employed 35,000 people.  In 2010/11, solar accounted for 20% of all UK renewable energy exports.

But its future has been jeopardised by the Department for Energy and Climate Change's mishandling of feed in tariffs (FITs).

In the last six months, our industry has had to endure a series of unsettling knee-jerk changes to FITs – the rate at which those with solar panels are paid for generating electricity.

Overnight on 3rd March, the tariff was slashed by more than half from 43p per kilowatt hour to 21p per kilowatt hour.

 Not only was the cut itself significant, the process through which it was handled was disappointing. The Department for Energy and Climate Change’s track-record since October includes one illegal cut, two appeals to the courts, three consultations and two feed-in tariff scheme changes following shortened consultations.   

All of this has undermined public confidence in the future of Solar electricity. Panel installation rates were roughly half in April this year to that of a year ago.  Indeed, the rate has nose-dived to such an extent that it would now take another 160 years to deliver the amount of Solar energy that the Government claims it wants to generate by 2020.

But there is nothing to be gained from focusing on the past. What is much more important is working together to rescue Solar’s future before it is too late.

The Department for Energy and Climate Change is currently consulting on a further round of cuts to FITs, effective from July. If this new reduction is implemented, the tariff will have reduced by as much as 69% in the space of three months. 

We urge you in the strongest possible terms to intervene and freeze any further cuts.

It is imperative to do so for two reasons.

First, it is more important than ever to persuade people that Solar represents good value for money. A further sudden change to the tariff will simply increase the sense that the days of valuable returns are over.

Second, our industry needs a chance to get back on its feet. 93% of UK Solar installation companies are now worried about their future.  Over 6,000 people in our sector have lost their jobs since last summer.  43% of solar companies have reported that they will make redundancies in coming months.

After six months of policy uncertainty and constantly moving goalposts, the last thing that this industry needs now is yet another slashing of FITs.

Last week you made a promise at the Clean Energy Ministerial summit that the Government would deliver on its renewable energy commitments.  

The Government has a very clear ambition of generating 22 GWp of solar by 2020. But put simply, there is no chance of meeting this goal if further cuts are seen.  

We understand that times are tough and that budgets have to be reined in. But Solar businesses and associated trades in the wider construction industry have already felt more than their fair share of pain in recent months.

Solar electricity has enormous potential to meet this country’s future energy needs. We ask you now to work with us to ensure that government policy in this area is sensible and sustainable.

Yours faithfully