The changes to the Feed-in Tariff (FiT) scheme proposed by DECC yesterday will create turmoil for the solar industry and are the latest and most damaging of a recent series of hostile actions taken by the Conservative Government across the renewables sector. The stability and confidence that the solar market has enjoyed since the last Government FiT disaster in 2011 has suffered a severe knock and left everyone involved in this vibrant sector reeling.
“We believe the FiT support should continue to fall as solar becomes cheaper to deploy, but through a structured and well managed subsidy scheme. Instead, the government evidently plans to remove support entirely,” said Simon Booth, Managing Director from REI. “This would appear to be politically motivated and will take away power from people and hand it back to big energy firms”.
If these proposals are enacted, what are we likely to see? All those schools, businesses and hospitals who have been seeking to take a more proactive stance on reducing their electricity costs by becoming local electricity generators, will lose this ability and have to rely once again on expensive and volatile fossil fuels. While the government’s need to control costs can be understood, it is inefficient to target material savings from the commercial rooftop sector as these solar systems were delivering a much needed stimulus to British SME’s and public organisations through savings in energy bills.
The commercial rooftop segment presently accounts for just 5% of the solar being deployed under the FiT scheme and the sector requires a positive boost, not a death blow. Whilst the consultation proposes a marginally lower reduction to the tariffs available for commercial systems, the investment case would still be left in tatters. Whilst the proposed FiT’s may be attainable in the future as further cost efficiencies are achieved, it is too large to happen all at once and would cause a sudden and prolonged freeze of new investments and the disappearance of a flourishing industry. Proposed stringent caps to annual deployment and the threat of scheme closure if deployment surges, create yet further uncertainty for this part of the industry. The deployment volumes proposed are ridiculously low and, being significantly below the historical volume of installations on commercial rooftops, are inconsistent with repeated statements from the UK government advocating an increase in deployment of solar on commercial roofs.
The Conservative manifesto made no mention of plans to attack the British solar industry, which has flourished thanks to overwhelming public support and delivered unprecedented efficiency improvements. Government should capitalise on that momentum, not push the industry over a cliff when it is so near to being able to repay public support through lower and more stable bills in the future – as well as sustaining tens of thousands of jobs.
REI will work closely with our industry partners to urge the Government in the strongest possible terms to re-think its proposals.