UK subsidy cuts leave solar industry reeling
Published Monday, 31st October 2011
The solar power industry, already taking both political and economic hits in the US, is now reeling in the UK as rumors are confirmed about the government’s plan to cut feed-in tariffs (FiTs) in half.
Citing both the dramatic drop in prices for solar photovoltaics (PV) and the rapid pace at which British homeowners took advantage of the tariffs to install solar panels on their homes, Climate Change and Energy Minister Greg Barker today announced a proposal to slash PV feed-in tariffs from 43.3 pence per kilowatt-hour to 21 pence per kilowatt-hour. The tariffs, which provide payments to homeowners for the solar energy they generate, apply to installations up to four kilowatts in size.
Introduced just a year-and-a-half ago, in April 2010, the feed-in tariffs were designed to encourage residents and businesses to install a variety of renewable energy technologies, from solar panels to anaerobic digestion systems. The tariffs for photovoltaics generated the greatest number of responses by far, resulting in more than 100,000 solar installations — more than three times as much as the government had initially projected — with a total capacity of over 400 megawatts.
That response threatens to drain available funding at current rates, Barker said.
“My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust,” he said today in announcing the proposed rate cutes. “The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.”
Jeremy Leggett, CEO and founder of Solarcentury, is among the solar energy business leaders who are railing against the government’s decision. He has called the move a “debacle” that poses an “existential threat” to the country’s nascent solar industry.
“Thousands will be out of work … ,” he said, though, “not without much, much noise.” He also noted with some irony that, on the same day the government announced the FiT cuts, it also gave approval for two new new power plants — one waste- and biomass-to-energy, the other a combined-cycle gas plant — with a total construction tab of nearly £1 billion.
Members of Britain’s Solar Trade Association have launched a “Cut Don’t Kill” campaign in favor of less biting subsidy cuts, and are planning to stage public protests at government offices.
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