‘We Support Solar’ Welcomes Government’s “clean energy cash back” scheme
But warns that the tariff numbers need to be higher to drive a big increase in investment in solar PV
By 2020 100,000 jobs could be created in UK solar with the right FIT.
‘We Support Solar’ today welcomed the Government’s plans for a “clean energy cash back” or feed-in tariff scheme for households, businesses and communities investing in solar photovoltaics (PV).
The proposed scheme, which is now subject to a three month consultation period and will launch in April 2010, is based on successful feed-in tariff models operating in other European countries. Key elements of the scheme include tariffs being paid on all generation for 20 years, an additional tariff for exported electricity, a target of delivering an investment rate of return of 5-8% “to make financing feed-in tariff installations a viable market proposition”, different tariff rates for different technologies and scales of technologies, and no annual cap on the amount of solar PV that is eligible for the tariff.
“But the company warned that the tariff pence per kWh numbers proposed in the consultation document coupled with an immediate 7% year on year degression rate, would fail to meet the Government’s consultation target of a 5-8% return on investment, with the prospect of solar PV in the UK falling further behind our European competitors.”
“Dr. Jeremy Leggett Executive Chairman of Solarcentury said “in recent weeks, the Government has accepted that solar PV can make a significant contribution to our future energy needs. We very much welcome that important change in emphasis by Ministers. Today’s confirmation of the clean energy cash back scheme is an important first step in delivering the enormous potential of solar power in the UK. It’s unfortunate therefore, that the consultation numbers, if confirmed later this year, will do little to boost demand for non domestic solar PV in the UK. This sector is or should be an essential prize for the Government’s feed-in tariff policy. According to the Government’s own consultants, non domestic solar PV alone can deliver 18 TWh per annum by 2020, or a greater contribution than that from the Severn Barrage on the back of a decent feed-in tariff. Unfortunately that massive potential will not be realised on the basis of the numbers published today.”
“Solarcentury operates in four European markets, the UK, Spain, Italy and France. Derry Newman Chief executive said “there are many helpful points in the document, and the overall message to UK solar PV customers and investors on feed-in tariff structure is a positive one. In Spain, Italy and France and elsewhere in Europe, Solarcentury is able to plan our business with confidence in the long-term feed-in tariff structures and levels in place in those countries. It’s now essential that the UK tariff does likewise from 2010.”
Andrew Lee of Sharp UK and the UK PV Manufacturers Association said, “We note that the Government’s starting point in its “lead scenario” Impact Assessment FIT model was an 8% return on investment, the equivalent of a 59p/kWh fixed tariff payment for domestic PV in 2010. But what’s actually proposed in the consultation document is a 36.5p premium tariff plus 5p for exported electricity. We welcome the fact that the Government has acknowledged that solar PV is a “tried and tested technology” and is easy to deploy. We also know from the Low Carbon Buildings grant programme that solar PV is clearly the technology of choice for schools, housing associations and other public sector customers. Given that, and the urgency of mobilising solar PV quickly to make a meaningful contribution to the Government’s targets and to create tens of thousands of new UK jobs, it is surprising therefore that the Government has proposed to slash the return on investment in the lead scenario for this technology to dampen demand from 2010. We are also extremely concerned about the proposed very high degression levels of 7% from the start of year 2, the proposed lack of index linking for either the generation or export tariffs and continued uncertainty around the future tax treatment of tariff income.”
“Dr Leggett added “The UK solar industry through the UK PV Manufacturers Association and “We Support Solar” campaign will continue to make the strongest possible public case for a tariff scheme which can maximise the contribution from solar PV by 2020. In doing so, this technology can deliver 100,000 new UK jobs, and develop major UK solar PV manufacturing hubs with massive export potential. We see today’s consultation very much as the start of an essential dialogue with Government on the eventual levels of the solar PV “cash back” needed to drive forward this technology in the UK.”