INDUSTRYPOLICY
Longer term impacts
Whilst there is no doubt that the government handling of the FiT review has been poor and undermined investor confidence in the UK renewable market it would be disingenuous and melodramatic to suggest that the proposals are a death knell for the entire industry. The government has done the industry a disservice by changing the playing field as partnerships and investments will falter based on the changes.
These effects have begun with WRS Energy announcing that a solar park planned for farmland in the UK has been scrapped due to the government change in policy. The government has talked about giving until August the 1st for current project okay but the reality is that they would need an operational okay from Ofgem and there is no large scale solar project advanced enough in the UK to meet this deadline. WRS Energy had submitted plans to North Somerset Council to build a two megawatt solar farm and initial investments had been sought.
The change in government attitude meant that the council required further information for planning permissions as they are unsure of the implications. This will be the first in a long line of expected announcements.
Despite the disappointment and financial costs, the over valued FiT did create an environment that saw the entire global PV industry take note and focus on the UK market. This may not have happened and the result is that some foreign companies are too far in to waste their investment and will continue to develop a local market and industry.
The focus will shift to domestic usage but this is in line with the original goal of renewable micro- generated energy to tackle fuel poverty in domestic settings while contributing to the lower emissions requirements. Another key point is that the review is still in consultation and the time is still there for industry to input to ensure the changes that will occur go some way to addressing reasonable fears.
The present suggestion is to slash all activity above 50kw and based the review on the almost 170MW of projects submitted for planning. A quick use of the calculator showed that the pot of money earmarked for the subsidy would not even cover these projects. The proposal is to cut FITs for PV systems to 19p/kWh for installations of 50-150 kW, 15p/kWh for installations 150-250 kW and
8.5p/kWh for installations of 250 kW to 5 MW or stand-alone developments. With the original tariff set 32.9p/kWh for installations of 10-100 kW and 30.7p/kWh for developments of 100 kW to 5 MW or stand-alone installations you can see that investors at the large scale feel aggrieved. While it seems appropriate to address the difference the dramatic drop off in price seems short sighted and also isolates members of the community the idea had been sold to including, schools, community organisations, charities and the like, who had been convinced of their own fund raising capacity.
While ground based projects will be difficult to support there should be careful consideration to a graduated change to PV subsidies, especially where existing structures and buildings are used, or when issues of fuel poverty are being addressed. Unfortunately the areas of England that had invested time and money into solar generation are the poorest and counties like Cornwall will suffer tremendously without the financial incentive to encourage investment in infrastructure.
Industry playing field
Whilst some in the industry are railing against the government decisions citing a lack of level playing field it may be of more use to make a playing field before you try and level it. When the initial FiT was announced the government made it clear it was not their responsibility to promote the scheme or to encourage uptake. This was the industry’s responsibility and a quick glance at mainstream media makes you realise how poorly the industry has responded to educating their consumer and customer base. Media reports on solar are full of glaring inaccuracies but never any follow up letters of complaint from industry bodies.
When Chris Huhne made a faux pas on TV regarding the capacity of 50kw the trained journalist did not have the knowledge to contradict the error. You can find reports on how solar is unsafe, lacking security or plain inoperable. When sold in isolation it is too easily hit with the argument that it cannot replace fossil fuel and it never will. As part of a renewable energy plan it is a vital part to the future of energy production.
To paraphrase a certain American President it is time for those interested to ask what they can do themselves to ensure a longer term sustainable and growing solar and photovoltaic industry.
© 2011 Angel Business Communications. Permission required.
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www.solar-pv-management.com Issue IV 2011
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