With the British government currently assessing the details of the feed-in tariff which is to be introduced in 2010, they will undoubtedly heed the example of Spain and the way in which the government there failed to live up to the initial expectations of the tariff. Spain, despite having one of the strongest photovoltaic sectors in the world, failed to capitalize on the successes of the solar industry there by changing the way PV investment was subsidized, something which has led to a steep decline in photovoltaic investment and installation in that country.
In conjunction with the global financial crisis which has taken a particularly strong hold of the Spanish economy, the reduction in solar investment has contributed to a culling of jobs and cutbacks in PV manufacturing in Spain, something which will see a surplus of PV plant being exported to growing solar sectors elsewhere in the world.
Industry insiders in the UK have put pressure on the government and lobbied the Department of Energy and Climate Change by expressing the importance of a feed-in tariff which stimulates sector growth by offering incentives and security to investors. It is generally accepted that a tariff rate of at least 20p per unit of electricity fed-in to the national grid by small scale energy suppliers would be sufficient in part to kick-start the solar industry in the UK following its inauguration in 2010.
Certainly, elsewhere where comprehensive feed-in tariff legislation has been introduced there have been marked successes in the uptake of photovoltaic technology and job creation in renewable industries. In Germany for example, the feed-in tariff legislation has proved to be consistent and generous in the provisions offered to those wishing to invest in the German green sector. Indeed, the German tariff model is often held up as an example of how to incentivise investment and build public awareness.
Spain is expected to experience a dramatic reduction in photovoltaic installation in 2009 with 375MW compared to 2008 installations of 2,500MW. Spain will now fail to live up to its ambitions of becoming the European Union’s leading renewable energy producer by 2020 largely because the Zapatero’s government has neglected the tariff scheme across the country. The introduction of a 500MW project cap along with the withdrawal of essential subsidies has seen the solar industry stagnate and since the new year, decline. Members of the solar industry in the UK will therefore be hoping that the British government follows the example of Germany rather than Spain in the way that they choose to roll out the much talked about feed-in tariff next year.