Big energy company lobbying puts nail in coffin for Feed In Tariff?

Stroud District Green Party has accused the coalition government of killing off the jobs-rich solar industry with its announcement last week that the feed-in tariff for solar-generated electricity would be slashed by 50% next year. You can see our press release below - you can also hear that I was and am still angry. I am also angry at the nonsense on Panorama about rising energy prices - see a good article here that puts folk straight.

Anyway the changes to the tariff mean that the video I made of a workshop on the Feed In Tariff as part of the Eco-Renovation Open Homes weekend organised by Transition Stroud will be very soon out of date! Catch it before it is: http://youtu.be/3PQVZw6Qp4o Here's the press release that went out at the end of last week - since then Green MEP Jean Lambert has referred the matter to the EU Commission as it impacts on our ability to meet targets re CO2 - see here:

"I fail to understand why the government would want to stifle an industry that has been so successful," said District Cllr Simon Pickering (Green, Slade), who works for Stroud-based green energy company Ecotricity.

"The move to slash tariffs will kill off a major growth industry and put thousands of jobs at risk - including many here in Stroud - and this flies in the face of the government's claims to want to promote private-sector jobs to make up for the cuts it is making to the public sector."

His colleague, District Cllr Philip Booth (Green, Randwick, Whiteshill and Ruscombe), who has for the last two years been helping to develop an Energy Strategy for Stroud District Council's own housing stock, added: "This is a bitter blow. To slash feed-in tariffs in this way is punishing success. How on earth can the solar industry that employs over 20,000 people plan for a future if the rug keeps getting pulled from underneath them? The speed and scale of this cut is wholly unacceptable. Why not a gradual approach? We had been hoping to massively develop solar locally to offset some of the savage government cuts to councils, to cut our carbon footprint, cut fuel poverty and create local jobs. Now this will need rethinking. This government's claims to want to be the greenest are a complete sham."

The government plans are to reduce payments for domestic-size schemes from up to 43.3p per unit to 21p for sites of 4kW or below, with installations completed after the consultation ends on 12 December 2011 set to receive the new lower rate from 1st April 2012.

The Green Party believes the timing of the decision is particularly damaging as it wasn't supposed to happen until April, yet the government has chosen to bring it forward and cause massive chaos, just as it did with the solar installations greater than 50kw back in March.

Note for editors: The feed-in tariff scheme was introduced in April 2010 and has seen over 80,000 solar installations, the creation of more than 22,000 jobs and almost 4,000 new businesses.

See Guardian article by Caroline Lucas here: 'Solar has been too successful - that's why tariffs were cut.' In it she writes: "The feed-in tariff, a mechanism designed to support and stimulate the solar industry with clear points for "degression" as costs of installing and running the technology fall, has been highly successful in allowing homeowners, community groups, local authorities, and businesses to realise the benefits of solar....It has always been accepted that the tariff would need to be revised in line with falling installation costs, but the government's failure to take a more gradual approach to cutting the rates, to enable people and organisations to plan ahead and adapt accordingly, risks reversing the achievements of this burgeoning industry.....The timing of the decision itself suggests a worrying level of disorder behind the scenes. We know that this reduction wasn't supposed to happen until April, yet the government chose to bring it forward - causing great upheaval, just as it did with the solar installations greater than 50kw earlier this year."

In Business Green an article adds: "The Government’s arguments for the FiT cuts are so easily countered that there must be another reason for the government’s desire to push through cuts to incentives that are so deep and (more importantly) so swift that they will force many firms to the wall. The government’s own impact assessment shows the impact on energy bills of delaying the proposed cuts until April would equate to an increase in annual average energy bills of about £1 a year by 2020 - or to put it another way tuppence a week. Here is one theory. It is well known that there is a battle going on in the heart of government over the scale and ambition of environmental policies and the cost versus the benefits of taking urgent action to address climate change.....According to the parliamentary rumour mill, there is an increasingly tense battle behind the scenes between those who think decentralised energy such as solar should play a key role going forward, and those who believe micro-generation will always be too expensive and it is more sensible to focus the UK’s efforts on large scale centralised low carbon projects. Unsurprisingly, the Big Six energy companies are lobbying hard in favour of this centralised approach, which would allow them to maintain their dominance over the market and head off the risk of millions of homes installing technologies that could slash demand for energy by anywhere between 30 and 70 per cent."

Interestingly at a Green Party meeting this week we had a discussion about the Feed In Tariff and I was pleased to hear that while the cuts have thrown large parts of the industry into a spin - and indeed broken the trust of many regarding any future deals - there are some solar companies responding to the changes with gusto - cutting prices by buying in bulk to still make it viable and worthwhile. We will have to see how it works but as I said earlier this is just not the way to make changes.