The proposal outlines tying the solar feed-in tariff (FIT) into the governments energy efficiency scheme, the Green Deal, which intends to promote and subsidize insulation of homes and properties in the U.K. But while some renewable energy technologies are more compatible with the thermal efficiency of homes, solar power has little relation.
This aspect of the proposal where homes and properties that fail to reach a certain level of energy efficiency only qualify for a nominal FIT rate of a few pence will have the effect of wiping out demand for photovoltaics and kill off the industry, say many installers.
According to Charles Shilston, director of Yorkshire-based installer Energy Initiative, photovoltaic uptake rests on it being an attractive investment option.
Between April and December this year REA and STA estimate that 670 megawatts (MW) of solar has been installed under the FIT scheme, 10 times more than had been anticipated by the government. "The 50-percent cuts the industry can live with, but it making energy efficiency a requirement of eligibility for the full FIT is seen as the killer," said James Beard, a spokesman for the REA.
The associations have gathered data from several surveys and commissioned analyses, ahead of handing in the letter and petition delivered to 10 Downing Street a few hours ago. The surveys address several issues and include provision of up-to-date data on the amount of photovoltaic capacity installed in the U.K. under the FIT scheme, cost scenarios for the average amount that electricity consumers can expect to pay on their annual bills to subsidize solar until it reaches grid parity, positive public perceptions of photovoltaics and the job losses that will result if the government continues with its solar FIT review proposals.
Ofgem recently concluded that energy bill increases are primarily due to, "rises in oil and gas prices" and that cost increases due to FITs remain "very modest".
According to Engensa, reaching grid parity would add only GBP6.50 (7.70) to annual power bills, which concurs with STAs Solar Revolution Strategy.
According to Friends of the Earth-commissioned analysis, the solar FITs review could cost up to 29,000 green sector jobs and up to GBP276 million (328 million) in lost tax revenues.
The Coalition Government’s Comprehensive Spending Review has capped the FIT budget for this Parliament and the industry believes the budget is nearly exhausted and more money is needed to secure its future over the next three years.
REA and STA estimate an additional GBP200 million (237 million) on top of the £860 million (1 million) for the FIT scheme will be required to retain current jobs in the U.K. photovoltaics industry and to deliver around 800 MW capacity a year.
This investment will get much of the industry close to parity, based on factors such as further reductions in panel prices and balance of system costs. They anticipate domestic solar could be down to two ROCs support (8.5 pence) the level of support deemed "acceptable" by DECC by the end of this Parliament.
The FIT scheme for photovoltaic electricity, which pays home and property owners for every unit of electricity they generate, will fall by as much as 50 percent from April 2012, assuming the government adopts proposals set out in the on-going consultation of the FIT scheme.
To keep within the remaining budget the Department of Energy and Climate Change (DECC) has put forward proposals, which on its own estimate could reduce the U.K. solar market by 90 percent, resulting in the loss of 22,000 jobs created since the FIT scheme was introduced in April 2010.
FIT schemes for incentivizing renewable energy take up, as introduced by Germany, require reviews and revisions of rates usually on an annual basis taking into consideration trends such as the falling cost of technology, installations and electricity price increases to ensure rates of return are sustainable.
In the U.K., the government bought forward the date by which it would cut rates for small scale installations giving six weeks notice in a bid to preserve the FIT budget envelope, which covers several other renewable energy generation technologies in addition to solar. This has initiated a surge of solar installation activity, with many established installers working flat-out to meet the deadline.
Photovoltaic suppliers and sellers have proliferated, with consumers reporting hard-sell tactics and salesmen attempting sell panels to qualify for the rate before December 12. The industry has installed over 40,000 photovoltaic systems since the release of the government review on October 31, more than the summer months combined.
Over 200 prominent people and organizations, including Jonathon Porritt, Tony Juniper, and Tom Paul, director of construction firm Kingspan, have signed the letter. Directors of the major U.K. NGOs, including Greenpeace, RSPB and 10:10, and several major unions, have also signed, alongside academics from Oxford University, Imperial College London, Edinburgh University, and many more.
Friends of the Earth collected a petition, delivered alongside the letter, signed by over 17,000 concerned citizens urging the government to protect the solar sector.
Gaynor Hartnell, chief executive of the REA, said, "We are calling on Cameron and Clegg to intervene to ensure a future for solar power beyond 1 April 2012. The cost of solar is falling so dramatically that in about five years time it should cost no more to generate ones own solar power than to buy it from an electricity supply company. To get there we need commitment and stability, not boom and bust."
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