The solar industry has welcomed new figures revealing the market is gradually recovering from deep cuts to the popular feed in tariff incentive scheme, which effectively halted growth across the sector last month.

The current figures are testament to the need for a consistent government policy for renewable energy, which will encourage public investment and interest in this sector. Solarfeedintariff would hope to see more positives coming from the UK Government in this regard.

Deployment of solar PV has increased steadily at around 620 kilowatts per week since the start of April, according to a report published by the Department of Energy and Climate Change (DECC) late last week.

Demand collapsed after the government changed the rules governing the scheme and halved the level of incentives available from April 1. The number of installations dropped to 885 in the first week of April, creating around 2.5MW of new capacity – a huge reduction on the tens of thousands of installations undertaken during February and March.

However, provisional figures show that 1,788 solar installations were completed in the week ending 3 June, creating around 6.4MW of new capacity. The figure is less than the 2,186 installations in the last week of May, however the June 3 figure is likely to be revised upwards slightly as new information is collected.

Paul Barwell, chief executive of the Solar Trade Association, said he was confident the industry was now “on the road to recovery”, following the recent confirmation by Climate Change Minister Greg Barker that the next wave of cuts to the solar feed-in tariff will come into effect in August, cutting payments for small scale installations from 21p/kWh to 16p/kWh.

Barker also announced a new mechanism for reducing feed-in tariff that gives the government an option to cut the tariff every three months from November, based on the level of deployment in the preceding months.

“The steady climb in deployment – which will see a minor blip next week owing to the Jubilee weekend – is a sign of a stable and sustainable future for the UK PV sector,” said Barwell. “Consumers are getting the message that returns are as good as ever and the feed-in tariff is finally stable.”

However, many industry insiders remain concerned that the industry has shrunk in size as a result of the deep cuts to feed-in tariffs.

Building company Carillion confirmed last month that it would cut 1,400 jobs following a drop in demand for solar as a result of the deep cuts to feed-in tariffs. Coventry-based Norton Energy Solutions also entered administration at the end of May, putting around 100 jobs at risk.

Originally published on BusinessGreen.

Ministers must send clear signals that they believe in new forms of green technology if they want companies to invest in them, a think tank has said.

Solarfeedintariff believes that it is important for the government to agree on a clear and comprehensive energy policy that will allow for greater investment into renewable energy with an all-inclusive outlook, rather than a focus on energy companies alone.

The Institute for Public Policy Research (IPPR) said the government had been blowing “hot and cold” on its commitment to cut carbon emissions.

That caution had made the energy sector jittery about investing, it concluded.

The government said its proposed Energy Bill would provide “certainty” for investors in the electricity market.

Energy Secretary Ed Davey said last month climate change goals could be met by banishing coal and gas in the 2030s.

But launching the draft Energy Bill, the government said it wanted to retain flexibility on the target date.

It had previously indicated it could make energy clean within two decades.

‘Mixed-signals’

IPPR research fellow Reg Plant said: “An ambitious decarbonisation policy offers a route to long-term sustainable economic growth, and productive British businesses.

“But businesses need to know the government will provide consistent support for their investments.

“And at the moment ministers blow hot and cold on their commitment to a green future.”

The IPPR said there were “mixed signals” because the government initially promised ambitious targets before seeming to waver about their effect on the economy.

It also said the Treasury should ditch plans to introduce a “carbon floor price” – a green energy tax setting a minimum price for greenhouse gases.

Mr Davey has said the scheme would encourage companies to develop more green technologies, but critics argue the tax would be passed on to consumers.

‘Best deal’

A Department of Energy and Climate Change spokesman said: “The government is proposing to reform the electricity market and give certainty to investors with the Energy Bill and revolutionise the energy efficiency of millions of homes and business across the UK through the Green Deal.

“This approach will deliver the best deal for Britain and for consumers, cutting energy waste and helping get us off the hook of relying on imported oil and gas by creating a greener, cleaner and ultimately cheaper mix of electricity sources right here in the UK.”

The IPPR report comes amid lobbying from environmental campaigners to cut subsidies to onshore wind farms further.

They argue their spread across the UK has been a blight on the countryside.

Mr Davey has already indicated the government wants to cut wind farm subsidies by about 10%.

Prime Minister David Cameron has said the growth of renewable energy is vital for the British economy.

He has promised to lead the “greenest government ever”.

Originally published on the BBC website

The UK has dropped down the Ernst & Young global clean energy table to be overtaken by Italy as analysts question the Government’s flip-flop support for renewable energy.

For the first time, the UK has dropped outside the top five nations on the global clean energy index following concern that Energy Ministers are shifting their focus toward gas as an alternative to renewables.

And to add to the gloom, investment in clean energy at the start of this year has dropped to its lowest levels since 2009 according to the latest Ernst & Young quarterly renewable energy Country Attractiveness Indices (CAI) report published today.

The report shows there is good reason for long term optimism in the global renewable energy sector as more mature technologies move ever closer to grid parity. However, the short to medium term sector outlook is generally downbeat as the Eurozone debt crisis and increased competition from Asian manufacturers continues to focus the minds of European policy setters.

The shale gas boom and political resistance to tax credit extensions also continue to pose significant challenges to the US market, the report finds.

The indices scores 40 countries across the world in respect of their national renewable energy markets, renewable energy infrastructure and the growth potential of individual technologies.

The ranking for the UK has dropped from 5th to 6th position, partly as a result of concerns around the UK’s commitment to renewables amid speculation that the Department for Energy and Climate Change (DECC) is considering natural gas to be a possible bridge fuel for the country.

There has also been a re-weighting in the index which takes into account the growing importance of solar within the global energy mix; this has had a negative impact on the UK which is traditionally a wind-heavy country given its strong resource and offshore potential.

The UK’s solar industry also received a fresh blow following DECC’s proposals for another round of Feed-in Tariffs (FIT) cuts in the coming months. However, the renewable energy sector as a whole, and offshore in particular, was boosted by plans to implement a significant spending programme to improve the country’s transmission infrastructure for renewable energy sources.

Ben Warren, Ernst & Young’s Energy and Environmental Finance Leader, explained: “There is significant concern across the green energy sector that the Government will shift its focus towards natural gas as an alternative to renewables. The Electricity Market Reform needs to deliver the right framework to stimulate investment across all forms of energy generation, including renewables.

He adds: “The recently published draft energy bill is a welcomed step in the right direction and signals clear progress, however it is important we clarify certain aspects of the new regime, particularly around the offtake arrangements for independent generators in order to avoid uncertainty for investors.”

To look at the impact on businesses, Ernst & Young commissioned a global survey of one hundred US$1b-plus companies operating within energy intensive sectors, identifies key issues faced at C-suite level. This revealed that 38% of respondents expect energy costs to rise by 15% or more in the next five years. They ranked energy efficiency, increased usage of renewable energy and growing energy self-generation are the themes driving corporate energy mix strategy discussions.

While reducing costs through energy efficiency measures is often the foremost objective of an energy strategy, a number of other subsidiary goals are also crucial, such as energy security, carbon reduction, and price stability; with regulatory compliance and reputational aspects also playing a part.

As the largest global corporations tackle the challenge of transforming to a low-carbon and resource-efficient economy a variety of technologies are being deployed. These include energy demand management (47%), building energy management systems (20%), energy-efficiency lighting (18%) and building automation (18%).

The survey also found that 41% of respondents generated some form of renewable energy with company-owned or controlled resources such as solar, wind, or bioenergy. However this practice is not yet widespread with only around one in ten reporting that clean company-owned energy accounts for more than 5% of their total energy production.

On the renewables contribution to energy generation, Warren commented: “While company-owned generation clean energy is low, 68% of respondents purchase some amount of electricity generated from renewable sources. However only 39% of all respondents would be willing to pay a premium for renewables, highlighting the importance of achieving grid parity and developing innovative project financing models.”

Warren added: “The main barriers to self-generation and renewables adoption are mainly related to risk and financialreturn. This suggests that adoption could come even faster with financing innovations and increasing cost-competitiveness of renewables. Only those businesses with a comprehensive and diverse energy strategy will be able to create and maintain competitive advantage in the resource-constrained world of today.”

(originally posted on Click Green.com)

After weeks of anticipation the Department of Energy and Climate Change (DECC) has today published the results of the latest solar feed-in tariff consultation. From August 1 the new rate for 4kW systems will be 16p/kWh, set in line with current installation figures.

With installed prices now more than 50 percent lower than in April 2010 when the FiT was first introduced, the latest tariffs are aimed at providing the same returns as originally set out.

Speaking in the House of Commons this afternoon the Minister of State, Greg Barker announced a range of alterations to the existing feed-in tariff (FiT) scheme. The UK solar industry will now benefit from a less complex degression management model, which includes smaller quarterly degressions linked to market deployment. This differs from the existing system, which offers an automatic degression.

As expected the new tariffs [seen below] will go ahead from August 1, one month later than originally planned. After noting lower-than-expected installation rates the Department decided to hold off on cutting the tariff until the market begins to pick up.

The tariff for a domestic solar installation will now be 16p/kWh, down from 21p, and will be set to decrease on a three-month basis by 3.5 percent thereafter. These degressions are expected to be delayed if the market slows down. Uptake will be viewed in three different bands (domestic (size 0-10kW), small commercial (10-50kW) and large commercial (above 50kW and standalone installations). Quarterly reductions will be determined within those bands.

The new tariffs, which will now be paid over 20 years instead of 25 years, should give a return on investment (ROIs) of over 6 percent for most typical, well-sited installations, and up to 8 percent for the larger bands.

Investor income will also be boosted by the increase in the export tariff, which will increase to 4.5p from 3.1p. This will be particularly beneficial for large-scale solar investors, who will be able to add the export tariff to the feed-in tariff in order to generate a reasonable return on investment. All tariffs will continue to be index-linked in line with the Retail Price Index (RPI).

DECC also revealed that organisations with more than 25 solar PV installations will get 90 percent of the standard applicable tariff, increased from the 80 percent proposed in February. This increase reflects new evidence heard on costs involved for these projects.

Although reduced, the new rates are aimed at kick-starting the UK solar market, with an aim of installation at least 800MW in 2012/13. In fact, DECC expects that these rates to provide the resources for the UK to achieve 800MWp to 1,000MWp each year to 2015, with an extended ambition for 22GW for 2020. These figures account for solar capacity to be installed in each year than the original FiT budget offered over five years, reflecting the strong growth the industry achieved in 2011.

These figures do not include larger projects that are now able to use two ROCs; it is suggested there could be a further 300-600MWp installed under this mechanism before April 2013.

“Today starts a new and exciting chapter for the solar industry. The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector,” Barker commented.

“We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain’s clean energy economy.

“I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Alan Aldridge, Chairman of the Solar Trade Association said: “We broadly welcome many of the Government’s decisions for how solar PV will be treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in DECC’s updated Renewables Roadmap; this should reassure consumers and solar companies alike that the Government recognises and stands behind a major role for the solar industry.

“Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable. Householders should be reassured the new Tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with Government to get this positive message out.”

The Minister also announced plans brought forward by Cornwall Council and the Building Research Establishment to set up a National Solar Centre in Cornwall.

Cllr Alec Robertson, Leader of Cornwall Council said: “The FiTs scheme allowed many people across Cornwall to learn about renewable energy, especially solar power, and Cornwall would welcome the establishment of a new National Solar Centre that  will be at the heart of the bright future for PV in the UK. We’re pleased that DECC has announced changes that improve the predictability for the FiTs scheme”

Although many areas of today’s news will inject an element of confidence into the UK solar market there are still some areas that are expected to cause concern. There is a fear that the August 1 cuts could continue to stall uptake, and that DECC has not accounted for this issue fully within the consultation.

Originally posted on Solar Power Portal.