By Chris Welby, Good Energy’s Commercial Director.

Recent speculation in the press about the future of both the Feed in Tariff (FiT) and the Renewable Heat Incentive (RHI) is deeply concerning.  Both are being considered in the government’s spending review and this uncertainty is damaging confidence and deterring people from investing in new renewable technologies.  So let us get a few facts straight.

1. There is no government money in the FiT and there does not need to be any government money in the RHI.

The Feed in Tariff costs are paid for by electricity suppliers, and ultimately by electricity consumers. Scrapping the scheme or reducing the payout will not decrease the public deficit. Rather, the decision by the Government to allow Local Authorities to sell electricity to the grid and claim the FiT could provide Local Authorities with an income stream to supplement any cuts in government funding.

The RHI could be built on similar lines, but paid for by gas suppliers. The gas industry has had a lot of support over the years from the state, something that customers off the gas network have been denied. Arguments about needing to include Oil & LPG providers are a sideshow. Gas suppliers, like electricity ones, are licensed and we have a template in the FiT, so there is no reason to delay further.

2. The Schemes do not reward the rich at the expense of the poor.

One of the biggest growth areas in FiT is social landlords. Landlords can invest in the generation equipment and earn a sufficient return through the FiT to cover that investment. Tenants will benefit from free electricity and thus lower bills. It’s a win-win situation. Private landlords are also getting in on the act (see previous blog). After all, renewable energy is probably a safer investment at the moment than buying more properties. Local Authorities will also be getting involved pretty soon.

The other big growth area is from entrepreneurial businesses (including some big household names) offering to install solar panels for free in return for the FiT payment, the occupier gaining the free electricity in return. There are schemes for all levels of society so it cannot be said to be the preserve of the rich.

With the RHI there is the added incentive of helping those off the gas grid who pay significantly more for their heating fuel. Rural poverty is a big issue and helping to address this will also meet social objectives, especially when combined with energy efficiency.

It is difficult to address fuel poverty through social tariffs and special fuel allowances - creating social housing which needs to import very little energy from the grid is far more effective.

3. Decentralised energy is key to energy security.

Generating your own renewable energy is the ultimate in energy security. There’s no reliance on third parties/government for your fuel – whether you are an individual or a country importing energy in the form of gas, oil, coal or uranium. The UK has been lucky in the past to have fossil fuel resources from coal and more recently North Sea gas. But these are on the decline and as a nation we are no longer self-sufficient in energy. But we could be once again – the UK is the windiest country in Europe. We believe that if people generate their own energy they will value it more and use it less – and we can turn the UK 100% renewable by 2050.

At heart, FiT & RHI are not just government schemes to influence consumer behaviour. They are energy industry schemes which can deliver on our desire to revolutionise and decarbonise the way we use and produce energy. So please, just let us get on with it. Go to Good Energy for more blogs on renewable energy.

On the day that Greg Barker, Minister for Decentralised Energy endorses “Feed-In Tariffs” for solar power, the industry releases figures showing how the industry has growth since the introduction of the policy.  Since April, homeowners and commercial sites have benefitted from guaranteed long-term tariff rates for the green electricity they generate.

“In the first five months of the scheme, the tariffs have had more impact on solar PV than other technologies, but that’s hardly surprising,” said Gaynor Hartnell, Chief Executive of the REA.

“Solar panels are the most straightforward renewable power generation technology for the average householder.  All you need is some roof space with the right aspect.  It is usually rapid to install and planning permission is rarely required as it is permitted development.   Even so, it is important to keep this growth in perspective.  Last year, the UK installed just 2% of the PV installed in Belgium, so we have a lot of catching up to do.”

There is considerable confusion about the exact number of projects which have been built as a consequence of the Feed-In Tariffs, as the Ofgem site includes projects that were built before the regime started.  So far around 2,000 such schemes have been transferred from the Renewables Obligation on to the Feed-in Tariff list.  These include installations that were commissioned after 15th July 2009, and are eligible for the full tariff rate, and those that were commissioned before 15th July 2009 that receive 9p per kWh.  There are currently around 6,945 new PV installations, commissioned since April 1st, benefitting from Feed-In Tariffs.  78 of these were larger schemes, serving multiple occupants and the rest householders themselves.  The deadline for notifying Ofgem that you would like to transfer to the Feed-in Tariff list is given as 1st October in Ofgem guidance notes. There are at least 570 more projects currently on the RO register, to transfer to the FIT register, and possibly many more.  There has been interest in larger projects, but none have yet been commissioned.  There should be some clarity very shortly, when Ofgem publishes a newsletter which will give information about the transferral timetable.

The Renewable Energy Association has surveyed its members, and claims that the tariffs have resulted in a 62% increase in employment levels to date, with an overall increase of 125% likely by the end of the first tariff year.  The growth in jobs among companies supporting the ‘We Support Solar’ campaign is also consistent with the REA survey findings.
The Renewable Energy Association and the We Support Solar campaign are delighted with this progress, welcome Greg Barker’s support and call for long term stability in order to bring forward investment.

“This data is strong evidence that the industry is now starting to expand in the UK after many years of stop-start support which got us nowhere,” said Leonie Greene, Campaign Manager for ‘We Support Solar’.

“The UK industry needs a sustained period of confidence and stability to invest for growth, so that deployment can be increased and costs can come down in future.  It is very encouraging to see Energy Minister Greg Barker today recognising the importance of the FIT scheme for the emerging PV industry - and for communities that want the power to go green.”

For more details, please see the joint REA, We Support Solar press release.

Rt Hon Chris Huhne MP
Secretary of State
DECC
3 Whitehall Place
London SW1A 2AW

c.c. Minister of State Charles Hendry MP, Minister of State Greg Barker MP

Dear Secretary of State,

A recent newspaper article based on an interview with Charles Hendry (Minister with the energy to bat for Britain, 23 August) suggested that funding “may be slashed” for feed-in tariff technologies such as solar pv and the forthcoming renewable heat incentive. As you know, heat is responsible for 47 percent of UK emissions and 49 percent of UK energy demand, so no Government serious about climate change or energy security can ignore half the problem.

Both renewable heat and solar pv are decentralised technologies, which put the power to generate directly in people’s hands. Costs come down when the industry can plan and invest with confidence, and economies of scale are achieved - that is one of the simple aims of these policy mechanisms. They are demonstrably effective in reducing costs - for example, the cost of pv halved in a decade in Germany under a similar scheme and costs under the UK scheme are forecast to more than halve by 2020. The UK’s pv market is now finally getting off the ground, with jobs projected to treble in 2010 alone.

You published a report with your July Energy Statement estimating that the cost to households of energy and climate change policies could be counterbalanced by savings from existing energy efficiency policies. We hope DECC Ministers will advocate this approach, including in the Comprehensive Spending Review, to explain how essential technological innovation can be paid for. We were disappointed not to see this argument made in recent media coverage. Pursuing energy efficiency alongside renewables is clearly the right approach.

Yours sincerely

Gaynor Hartnell
Chief Executive
Renewable Energy Association

Alan Simpson
Sustainable Energy Adviser
Friends of the Earth

Peter Kendall
President
National Farmers’ Union

David Caro
Chair FSB Environment Committee
Federation of Small Businesses

John Sauven
Executive Director
Greenpeace UK

Ray Horwood CBE
Chief Executive
National Federation of Roofing Contractors

Peter Kindersley
Farmer and Entrepreneur

William Worsley
President
Country Land and Business Association

Tony Juniper
Sustainability Adviser and Campaigner

Frances O’Grady
Deputy General Secretary
TUC

Howard Johns
Chairman
Solar Trade Association

Brian Berry
Director External Affairs
Federation of Master Builders

Chris Baugh
Assistant General Secretary
Public and Commercial Services Union

Andrew Lee
General Manager
Sharp Energy Solutions Europe

Neil Schofield
Head of Sustainable Development
Worcester Bosch

Gavin Hayes
General Secretary
Compass

Ed Mayo
Secretary General
Co-operatives UK

Julia Craik
Managing Director
The Premises Studios Ltd

Derry Newman
Chief Executive
Solarcentury

John Meadows
Managing Director
Schott UK

Dave Sowden
Chief Executive
Micropower Council

Leonie Greene
Campaign Manager
We Support Solar

Andrew Leech
Executive Director
National Home Improvement Council

Craig Jackson
Senior Architectural Technician
South Yorkshire Housing Association Limited

James Hoare
Managing Director Ardenham Energy

Juliet Davenport
Chief Executive Good Energy

Carol Tanner
Director of Finance and Marketing
Plug Into The Sun