INDUSTRYPOLICY
millions of pounds because of the changes. The response and commentary from industry personalities was fast and furious claiming the Treasury was forcing the hand of the DECC (Department of Energy and Climate Change) and accusing the department of incompetence. Many of the same people were involved in encouraging the original additive to the Nuclear Bill. In both instances the evidence is of pressured decisions with rushed consultation and decisions.
Mr Barker’s announcement followed the fast- tracked review of large scale solar feed-in-tariffs announced in February. Mr Moss said that he was of the opinion that the situation had arisen out of incompetence at DECC.
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immediate and unfavourable. Both the previous and incumbent Government had led investors to believe that the tariff would not be tampered with before a review planned for 2013.
“The future of Britain’s development of solar energy has been totally destroyed,” said Ken Moss, the CEO of mO3 Power, a UK solar developer. “At a stroke, all solar developments above 50kW have been rendered totally non- financeable. We had an opportunity to develop another renewable of low-carbon energy alongside wind and nuclear. That opportunity has been wiped out,” he said.
Under the Government proposals, which are subject to an eight week consultation, FiTs payments for solar developments over 50kW will be cut back and the drop off is steep from the outset. The largest reductions will apply to solar development between 50kW to 5MW. The standard size for a factory or farm-based scheme. These new recommendations could become law as early as 1st August. The fast track review leaves little time for industry or community response and there is no doubt that the review mishandling by the government has left a sour taste for investors and creates a danger of scaring foreign investment out of future renewable schemes if the rules can change so readily and with such impact.
At the recent Solar UK Conference held in London, James Beale of UK Trade and Investment commented that investors were likely to lose
“Mr Barker presented the original DECC document to the Treasury without understanding the content of or the complexity of the FiT proposal,” said Moss. “ Through lack of understanding, he delivered a proposal with just enough tariff for domestic roof top, yet in October presented the CSR and said all was rosy in the garden for all the industry. Four weeks later he realised his mistake and insulted the large scale community calling us ‘gold diggers and speculators’. In the mean time, we have continued to invest millions of pounds into this industry on the basis we believed the government was committed to a multitude of renewable streams.”
Commercial investors have warned that cutting the FiT, only one year after its inception, will potentially sign the death warrant for Britain’s renewable power industries.
“The whole investor market was totally disengaged as a result of the feed in tariff being ripped up,” said Ben Warren, an industry consultant working with Ernst and Young.
“It’s an absolute disaster,” said Ray Noble, a board member of mO3 Power and a solar specialist at the Renewable Energy Association. “No new projects will start after this comes into effect.”
Climate Change Minister Greg Baker said that he wanted the available subsidy, which is paid for by levies on consumers power bills, to be used for small scale domestic solar arrays that will increase the ‘public’s engagement with renewable energy’. The doom and gloom comments are relevant if you have invested in a large scale ground based PV solar farm or project but is the negativity valid for the entire solar industry?
www.solar-pv-management.com Issue IV 2011
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