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.

According to a recent survey conducted by the Center for Alternative Technology (CAT), the majority of British households would consider adopting photovoltaic technology with 90 per cent saying that they would consider and 23 per cent saying that they would definitely adopt the technology in their homes. From the 750 homes which were surveyed, the results show a shift in general public opinion towards the practical application of renewable technology, especially if it is something which proves to be financially viable in the long term.

The long term financial viability of all small-scale renewable projects hinges largely on the upcoming Feed-in tariff, likely to be introduced in 2010. The principle of the tariff is to offset the expense of producing power by non-fossil fuel means and provide incentives to those wishing to invest in renewable plant such as photovoltaic technology. The fixed rate for megawatts fed-in to the national grid by small scale renewable power producers is paid for by existing power companies who are obliged by the government to buy the renewable megawatts, the cost of which is spread across the consumers.

The survey noted that this high potential take up of PV technology would be dependent on the feed-in tariff paying 50p per unit of energy supplied in to the grid. In Germany, this exact system of tariffs has been used successfully to make Germany one of the worlds leaders both in terms of PV technology adoption and public awareness of greener energy production.

CAT spokesman, Mark Watson commented,

“Photovoltaic systems are one of the easiest renewable energy technologies to integrate in towns and cities and as the survey results show, they are generally liked by the general public.”

Financial consultants Ernst & Young have rated the UK as the fifth most popular country to invest in as a result of the Energy Bill which was passed in November according to their Renewable energy country attractiveness indices.

Britain’s rise to joint fifth with Spain has been attributed to recent legislation which specifically sets out provisions for the introduction of Feed-in tariffs by 2010. Feed-in tariffs are fundamental to investors as they guarantee a premium fixed rate for energy fed back into the national grid by small, renewable energy producers.

Also, acting as an important stimulus for investors is the falling value of Pound Sterling which is predicted to reach parity with the Euro in the new year.UK renewable projects increasingly expensive as imported technologies from Europe continue to rise as a result of the exchange rate.

“The falling value of the pound is making

“The declining price of oil is compounding the problem by reducing project revenues as wholesale energy prices fall, resulting in many projects becoming uneconomical. It is unlikely that falling commodity prices such as steel and copper will compensate enough” predicts Head of renewable energy at Ernst & Young, Jonathan Johns.

The recent Renewable energy country attractiveness indices saw Germany reach first position as a target for investors and is now seen as the leading light in terms of viable renewable energy innovations.