REGIONAL I UNITED KINGDOM
bankruptcy before the process is complete. Statistics have been slippery and inconsistent as disparate voices and ideas try to be heard. An excellent example of this is how much the FiT subsidy process actually costs tax payers. Depending on whom you speak to, this ranges from 30 pence a head to £30 pounds a head to fund the process. Of course everyone has a source to back their claims.
Need to take stock
The truth is that the solar FiT scheme that was announced at the end of the last government’s tenure was not a well thought out document. It was a last minute addendum to a nuclear bill that was rushing through the parliamentary process. The solar scheme was big on intention but was not well geared to cope with changing industry dynamics and was based on cost assumptions that were out of date almost before they were announced.
The global solar industry has continued to make technological advances that have continuously reduced the cost of modules but the FiT subsidies remained the same increasing the return of investment to double figures for some companies. Unfortunately there was no mechanism within the original legislation for the subsidy to respond to price changes and there was a lack of industry definitions that allowed projects to be viewed as commercial, domestic or social meaning all the projects were lumped in one group allowing the current government to view the industry as a single number of output when in truth there is a variety of solar technologies and applications. The UK industry, like the rest of the global solar industry, has not helped in such matters with no combined approach to the issues at hand ensuring the government was hearing different things from different people. Any government must act on the information it is given and an attendance or interview with the different groups endeavouring to be the ‘voice of the industry’ reveals very
With such extreme views within the industry it has been easy for anyone stating any view to find facts that best suited their perspective. This lack of a cohesive message has turned out to be a key factor in allowing decision makers to choose whichever option they prefer and be able to choose the data that best suits the outcome. In the case of the government it was the high rate of return that had become available. The fact that companies and individuals were able to receive such high rate of returns seemed to be the bedrock of the government’s arguments in supporting the need for change. Greg Barker made it clear in his speech lin Birmingham at the Solar Power UK conference and in the subsequent press conference that such a high rate of return on an investment was intolerable. He went as far as calling it morally intolerable in a meeting of local counsellors.
This sort of commentary is a bit hard for many people to take at a time when there is anger towards the monopoly behaviour of the big 6 energy companies and complaints of their soaring profits. There is no doubt that subsidy levels needed to change for a range of reasons for both government and industry but the method and execution of change creates a platform for cynicism.
Controlling costs
The government claims they are saving energy bill payers the excess burden of subsidising clean energy efforts but none of this stacks up. With conflicting figures on what it would cost the
different view points and opinions. I have found that individuals I have spoken with in the industry all agree that a change to the scheme was required but there is no agreement on how these changes should occur. One company operator told me that he would need 32 pence to be able to maintain viability whereas another operator expressed pleasure that the review would be so quick stating that it would shake out those companies who only came to take advantage of the subsidies.
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www.solar-pv-management.com I Issue X 2011
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