The renewable energy industry has warned that the renewable energy sector risks failing in its infancy if the proposed closure of the micro-renewables fund, worth £50m goes ahead. The possible loss of funds along with the news that feed-in tariffs will not be introduced until 2010 has concerned some members of the industry who have lobbied the government for essential funds, crucial to the development and investment in small, renewable installations.
Ed Milliband, Secretary of the newly formed Department of Energy and Climate Change announced that all funding for low carbon public sector buildings will be withdrawn from June 2009. The scheme, called the Low Carbon Buildings Program (LCBP) has, until now paid up to half of all costs incurred in the installation of micro-renewable facilities in public sector buildings and has been absolutely essential for covering the inevitable cost of installing renewable energy plant.
Philip Wolfe, Director of REA criticised the government proposal stating, “The government rightly talks about a green jobs revolution, but these initiatives will be strangled at birth if the companies that deliver them have no market in the meantime.”
Lobbyists are arguing that the government should continue the funding program at least until the introduction of feed-in tariffs in order that the industry, in particular manufacturers of heating units do not collapse. The proposed feed-in tariff will help renewable investors by guaranteeing a fixed, premium rate for power fed-into the national grid. The premium rate paid for the green megawatts will be paid for by existing power companies and will offset the expense of generating power by renewable means. In places such as California, Germany and Australia this scheme has been extremely successful as a way of attracting investment.
The importance of the LCBP and the vitality it provides to the industry was highlighted by Ray Noble, ex UK head of BP Solar, “Before, there was about £8-10m worth of funding per year. The LCBP nearly tripled the amount.”