With the UK government passing the Energy Act and establishing the Department of Energy and Climate Change, they have taken important steps to both meet their climate change objectives and revitalise the economy through the nurturing of a new green economy. Certainly, with the European elections at the fore, many of the electorate are taking a much closer look at the green policies of prospective political parties. Indeed, the results of the survey were thus,

·          77 per cent believe the UK government ought to do more to reduce carbon emissions

·          57 per cent say a political party’s climate policies would influence how they vote

·          70 per cent want the UK government to take a leading role in international climate change negotiations

·          90 per cent have taken steps to reduce their own carbon emissions

With these results in mind, the importance of recent climate change legislation affecting the solar industry will be even more in focus. The feed-in tariff provisions set out in last years Energy Act will become a reality next year as a mechanism designed to kick start investment in the fledgling industry.

With the UK government going through a consultancy process to determine the optimum tariff structure to energise the much hyped green economy, the YouGov report findings such as those above will offer a stark reminder that the public are now fully aware of the importance of government action in determining the success or failure of the UK solar industry.

2008 marked an important watershed for the solar industry and photovoltaic technology in general, particularly in the UK as the British government passed legislation designed to promote green energy. The Energy Act of November and the establishment of the Department of Energy and Climate Change was seen to mark a shifting of gear in British political circles as the UK government sought to establish environmental legislation, emulating the success stories of California, Spain and Germany. The solar successes, particularly in Western Europe have been based largely on the establishment of coherent feed-in tariffs which have proved to be effective mechanisms at incentivising investment in the green sector.

In spite of the global photovoltaic revolution breaking out, the UK government has been slow to get behind the solar industry with enough weight to encourage green investment en masse. The recent political rhetoric of the prime minister Gordon Brown in which he espoused the need for a ‘Green New Deal’ in order to revitalise the economy through ‘greentech’ investment has not been immediately followed up by action. The feed-in tariffs which were established in principle at the end of last year will not come into effect until 2010 and until then, there are no other government schemes in place to make solar investment viable since the government terminated its grant program without warning at the beginning of the year.

Leading members of the solar industry, along with representatives from the construction industry have lobbied the government in order to ensure that the government’s rhetoric on solar and climate change is matched by action which will allow the solar industry to reach its potential in the UK, just as it is doing in Germany with outstanding commercial results.

Despite the UK governments recent action on solar policy in the form of last year’s Energy Act and the setting of provisions for the introduction of feed-in tariffs in 2010, the report criticized the UK, stating that it lagged behind rival states in terms of current initiatives in place to incentivize the growth of the solar industry in the UK. With this deficiency in mind, the report offered the British government the D-minus grade along with an assessment that the solar industry in the UK remained,

“A very small market with no significant support for growth at this time”.

The Global Solar Report Card highlighted the fact that subsidies for carbon energy still outweigh those offered to renewable energy producers and that this will have to change if there is to be a large-scale revolution in the way energy is produced in the UK. The report, based on three main criteria, the scale of government incentives and legislation, the kWh of solar plant installed and campaigns designed to change behavioural patterns among the population was damning of the UK government’s failure to plug gaps in solar funding.

Although it is expected that 2010 will see the introduction of a coherent feed-in tariff, until then the government is doing little, particularly in comparison to other large economies to kick-start the solar industry with legislation. The solar feed-in tariff, thought to be the most effective means of stimulating investment in the solar industry has been highly successful in those places where they have been introduced with generous incentives for investors.

Germany topped the report card with an A-grade, an accolade based on the German government’s strong action with regards to setting up provisions for the industry and initiating a revolution in the behavioural changes of investors who now see Germany as a secure, high yield prospect for building their green portfolio. This obvious correlation between solar industry success and the implementation of solar feed-in tariffs will hopefully not be lost on the Department of Energy and Climate Change, currently going through a consultancy process on the best way to set up tariff legislation.

The number of lobby groups lending their support to the solar industry has grown exponentially over the last year with the We Support Solar Campaign acting as a focal point for members of the UK solar industry. Those within the industry will have some sympathy with the Global Solar report card’s findings and will see the absolute necessity for a strong feed-in tariff to breathe life in to the solar sector up to, and beyond 2010. The report went on to state that,

“Latest estimates by the International Energy Agency show renewable sources account for only $10bn (£7bn) of the $250bn-$300bn allocated to annual energy subsidies worldwide. If we are to deal with the current crises and the ones just around the corner, then every dollar, euro, or yen is going to have to work smarter and harder.”

The new PV systems will be part of a bespoke service which will allow a choice of colours and more importantly, can be installed on roofs more easily making the possibility of future retrofitting much more convenient as the systems can be locked in to place on brackets. The new ‘Slot and Play’ system which was exhibited in Earls Court last week will offer value to new low carbon projects across the UK where buildings are fitted with the latest PV technology.

Key to the success of companies such as Sharp Solar is the highly popular feed-in tariff, due to be introduced next year by the UK government. Members of the industry have, since November’s Energy legislation and the creation of the Energy and Climate Change department been highly supportive of the tariff system as they believe it will give a much needed kick start to renewable investment as it has done for example in Germany.

Solar Sharp have given their backing to the ‘We Support Solar Campaign’ along with other leading members of the industry, providing a lobby which is seeking to push solar to the forefront of the energy debate and seek key government legislation and funding which will be paramount to the initial success of investment in Photovoltaic technology in this country.

The crucial factor in the success or failure of the solar industry will of course be the feed-in tariff, designed to spur the growth of investment in the renewable sector by guaranteeing long-term, healthy yields to investors. The long-term contracts set a fixed, above market rate for megawatts fed in to the national grid by small (systems under 5MW), green energy producers. The fixed rate for the renewable energy is paid by the power companies, the additional costs of which are absorbed by all consumers adding a small amount to monthly utility bills. Certainly, in order to keep apace with the infrastructure of areas such as Germany and California many believe that the government should set a rate of around 50p/kWh unit generated and the ‘We support Solar Campaign’ will make this clear when they produce their research findings to the government at the end of March.

Regarding the possible findings of the report, Andrew Lee of Sharp Solar commented,

“I can’t pre-empt what it is going to say, but there’s a lot of work being done on feed-in tariffs. There are a number of different options how feed-in tariffs would work, and certain job creation scenarios. There could be 300,000 to 400,000 people in this market if the feed-in tariff is fit for purpose.”

“Payback time will depend on what rate is decided when feed-in tariffs are introduced. In Europe there are many different rates but I would hope for a 20p rate for the UK – the payback time for people with small-wind turbines would be greatly reduced” added Glover.

The Energy Act legislation passed in November will see the full introduction of feed-in tariffs by early 2010 and allow small energy producers such as Proven to sell surplus back into the national grid at a fixed rate. Some in the energy industry have reservations about the public awareness of the feed-in tariffs at this point in time, however at is hoped that come the roll out, knowledge of the tariffs will have filtered through the media. Jamie Glover expressed this concern, “Widespread knowledge of the new feed-in tariffs is not available at the moment so we have not experienced a greater interest because of it. But I am sure that clarification of what the tariffs will be, as well as time, will ensure that the public are more aware of the savings and benefits of generating your own electricity.”

However, despite these concerns during the last year there was a 50% increase in public awareness of the new feed-in tariffs attributed to soaring household electricity bills and a general increase in technological knowledge. Proven, which has recently installed a turbine at a school in Leeds certainly believes that by 2010 a 20p tariff rate will make their business viable in the long term.

The new laws will see the UK cut gas emissions by 80 per cent by 2050 and open the door for feed in tariffs, with the Government paying owners of grid connected solar and wind systems a premium rate for the energy they produce.

Environmental groups and members of the renewable energy industry have warmly welcomed this new legislation. The Renewable Energy Association released the statement,

“The Renewable Energy Association is delighted that that government has recognised the advantages of a tariff-style incentive scheme which will open doors for small-scale producers of renewable heat, electricity and bio-methane,” Philip Wolfe, Director

It is generally accepted that the progressive feed-in tariff policies of European countries such as Germany, France and Spain have stimulated and accelerated the growth of renewable energies there.