REGIONAL I UNITED KINGDOM
Table 1: Current and proposed generation tariffs for solar PV
returns between 4 -7% which remains attractive when compared with other financial options. Factor in the continuing lower prices and the savvy consumer could do very well. None of this changes anything for companies suddenly facing a 6 week instead of 6 month time frame. As soon as the announcements were made I began to receive communication from companies announcing lay offs and even closure as companies struggle to fill orders within the 6 weeks further compounded by a lack of product in the supply chain. Any new product to fulfil the time line will need to be sourced through Germany or China due to a lack of manufacturing in the UK. It is unlikely many orders will be fulfilled in such a short time scale as you would be hard pushed to get product here in time from Germany, let alone China. For many companies it will be the end off the industry.
Luckily not all companies have bet the company fortunes on government subsidies staying at such a high level and some of these are actively supporting the changes believing that the high rate of returns only attracted cowboys and greed lending a bad name to the overall industry. One company director was quoted requesting they close the door on the way out. These companies will ensure that the industry moves forward but no- one is yet aware in what size or format. The one thing all seem to agree is that the government decision making process has not being handled well leading to confusion, investor mistrust and conflicting messages to the public who are the eventual end customer. The UK solar industry has being hit with an enormous amount of negative propaganda meaning many in the community do not understand the benefits of solar micro generation whilst many politicians and industry people believe solar is more expensive than traditional duel sources.
On a like for like basis, solar is more expensive than traditional fuel sources but only if you look at initial set up costs. Over the expected 25 year life span of solar modules there is a greater saving as there is no need to mine for raw materials. Unfortunately there has been little effort by the industry in exploiting these figures or to combat the negative propaganda that competitive industries have propagated. With the continual reduction in prices that will ultimately occur it will not be long before initial solar costs are comparable to main stream industry. The government has let the industry down but not just the solar industry. They have let down the long term energy plans for the UK with mixed messages and loose policies that seem to be chasing quick financial fixes rather than a real long term strategy. The UK needs strong leadership and long term choices in the future energy needs. Neither is obviously present at this stage. The government will not have an easy ride with the choices they have made and already the U.K. Parliament’s Environmental Audit Committee and Energy and Climate Change Committee has launched an inquiry into the Department of Energy and Climate Change’s (DECCs) proposed feed-in tariff (FIT) cuts.
With opposition coming from all quarters on the timing of the change I would expect to see the date of change push out to early next year. If a private company tried to change tender rules or policy standards in such a manner they would be breaking all sorts of corporate laws. It is unlikely the government will stay unscathed in this matter.
Final thoughts
Recent events in the UK industry have left a sour taste in the mouth of most involved but there is something everyone needs to remember. The announcement is a proposal and part of a consultations process that does not conclude until the end of the year. Despite the negative feelings, people need to understand the consultation is not complete and there is time for voices to be heard. Already there are plans for a march on the Prime Minister’s quarters later this month and an on line petition is attracting thousands of signatures and is the first instance that the competing industry bodies have truly come together. Hopefully not too late to create a more coherent and consistent message that is about the industry without the self interest that dominates the landscape.
There is no doubt the government has handled communication and change very badly in the FiT process leading to international
Any new product to fulfil the time line will need to be sourced
through Germany or China due to a lack of manufacturing in the UK. It is unlikely many orders will be fulfilled in such a short time scale as you would be hard pushed to get product here in
time from Germany, let alone
China.For many companies it will be the end off the industry
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www.solar-pv-management.com I Issue X 2011
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