INDUSTRYOVERVIEW
and March if the higher tariffs had remained available. Assuming the deployment was split between tariff bands in a similar ratio as earlier deployment (with around 75 per cent (of 50 kW capacity being in the 0-4 kW band), this would have led to additional costs to consumers around £100 million per annum, or £1.5 billion in discounted terms over the tariff lifetime.”
In response to these claims a number of parties announced their own research and figures. Not surprisingly the new figures and interpretation showed an opposing view with accusations that the government was completely wrong. One company went as far as claiming their own analysis proved the government was fudging the truth so I contacted them and asked for clarification on their statement and requested they offer proof of their internal number crunching they claimed to do.
After sending me links to publicly accessible DECC sites I once again sought clarification on their own facts. As I pointed out to them I would be remiss not to fact check and have evidence of the claims. Otherwise it was just gossip and sadly this unverified commentary made a number of news sources despite being nothing more than a reactionary comment to unpopular decisions. Such behaviour does nothing to help the UK industry move forward to a long term sustainable future.
Who is really missing out
The new figures announced by the Government means the present tariff rate is 21pkW, which still allows a profitable return on investment of up to 10%, tax-free and index-linked. However the new regulations come with a caveat that for any house to qualify for the subsidy there must be an energy rating of C or higher. There is some confusion whether this will be reduced to D but the conflict in data is not insignificant. If the rate is C then around 86% of houses do not qualify for the FiT according to opposition figures. Even if the rating was set at D around 30% of UK houses will not be eligible for solar subsidies.
This sort of policy seems to fly in the face of the supposed reasons that the government is keen to kick start such renewable energy policies. Whilst it is understandable that companies involved need to make profits the rationale for entering into such markets was not economic but as a response to growing concerns of fuel stability and the ever increasing impact of energy prices and poverty.
Changing the rating on required houses may save the government money but directly hits the members of society that the government claim to support and that is the poor and the vulnerable who have trouble paying their quarterly bills let alone
have the money to improve their houses to be able to accept support. A great merry go round of passing the responsibility and sadly an issue the industry itself has failed to recognise or capitalise on. Intent as they are on screaming foul rather than seeking future direction and plans.
The resultant mess has seen the standing of solar and PV fall drastically in the UK communities. A potential saviour for energy needs and poverty reduction has become a sand pit of differing self centred goals and expectations on an industry that barely existed two years ago. Strangely the government ran an industry training programme recently, inviting German key people to provide an example for the UK industry. This struck me as something that should have been done closer to the start of the FiT process rather than a knee jerk reaction to the problems it faced. The German industry is more attractive to the UK government as it begins to slash its own successful FiT programme.
The future is bright
The recent activities have been painful for some in the industry and jobs created on an artificially grown industry will be lost. How many and which areas are up for conjecture as this is another area that statistics fly around freely but with little ballast to their claims. Job loss is never a great thing but the industry in the UK was simply too big and too full of under trained individuals creating a bigger industry problem than recognised. Bad word of mouth is the last thing the solar industry needs.
It is a technology that can provide much but not as much as some claim and far more than detractors spout. The hope is that the current changes will push out the less qualified and less committed to the industry. Sadly history shows that this is unlikely to be the case but there will be a reduction of players in the UK market. All of which will erroneously be blamed on the government.
Despite the pain of the next few months there is a strong and sustainable industry growing and it is in everyone’s interest to start developing industry plans for the next decade of growth that the region is likely to see. The growth spurts may not be as dramatic as the last year but a long term industry is not only viable, it is happening now. There are plenty of examples around the world of similar industry growth and plenty of lessons. Over subscribing your subsidy scheme leads to a Spanish disaster where companies and industries fell in the face of overwhelming mathematics.
This disaster is unlikely to hit the UK market but the players who are serious about being involved in the long term market need to step up to the plate and provide leadership to the solar and PV industry which is but a part of a broader renewable energy market needing to find its place in the global energy industry. Ensuring your company is profitable is vital to any business man but ensuring a strong secure industry base is vital for any business whatsoever.
© 2012 Angel Business Communications. Permission required.
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www.solar-pv-uk.com Issue I 2012
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