The Government is now seeking permission to appeal to the Supreme Court. Friends of the Earth says the move will create yet more uncertainty for solar firms and after two courts have ruled their move illegal is urging Ministers to concentrate on safeguarding the industry rather than wasting more time and money on further appeals.

The High Court ruled shortly before Christmas that Government plans to cut payments for any solar scheme completed after 12 December – 11 days before the official consultation closed – were unlawful. The judgement followed legal challenges brought by Friends of the Earth and two solar firms, Solarcentury and HomeSun, last month.

Today’s judgement will prevent Ministers rushing through cuts to feed-in tariff payments in future, restoring some confidence to the UK’s clean energy industry. But Friends of the Earth warns that unless Ministers change other parts of their solar subsidy proposals, up to 29,000 jobs could be lost.

Friends of the Earth is urging Ministers to find more money – paid for from tax payments the industry generates – to safeguard the long-term stability of the solar industry. The environmental campaigning charity is also calling for crucial amendments to proposed Government solar payment changes, including re-examining over-strict energy efficiency rules that will prevent 90 per cent of houses from claiming solar subsidies.

Today’s ruling means that, subject to any further appeal to the Supreme Court, solar tariff payments will remain at 43.3p (p/kWh) until 3 March 2012 when – following Government moves last week – they will fall to 21 pence.

Friends of the Earth’s Executive Director Andy Atkins said:

“This landmark judgement confirms that devastating Government plans to rush through cuts to solar payments are illegal – and will prevent Ministers from causing industry chaos with similar cuts in future.

“The Government must now take steps to safeguard the UK’s solar industry and the 29,000 jobs still facing the chop.

“Ministers must abandon plans to tighten the screw on which homes qualify for solar payments – and use the massive tax revenues generated by solar to protect the industry.

“Helping more people to plug into clean British energy will help protect cash-strapped households from soaring fuel bills.”

The green campaigning charity said the Government must introduce a clear plan to reduce solar power payments in line with falling installation costs, rather than prolonging industry uncertainty and jeopardising jobs by pursuing an expensive legal appeal.

Following a legal challenge by Friends of the Earth and two solar firms Solarcentury and HomeSun just before Christmas, the High Court ruled that the Government’s plans to rush through sudden cuts to solar payments – before its own consultation had ended – were illegal.

The court refused permission for an appeal on the basis that the Government has no realistic prospect of winning. The deadline for lodging an appeal is 4pm tomorrow, 4 January 2012.

Friends of the Earth is also calling on Ministers to reduce tariff rates in a planned way from February 2012 to protect jobs, and to increase the overall budget for the feed-in tariff to allow more people – including poorer households and community groups – to benefit from solar power.  The group says this is possible without any additional cost to bill payers because of the increased tax revenue the scheme is generating.

Friends of the Earth’s Head of Campaigns Andrew Pendleton said:

“The Government’s illegal cuts to solar tariff rates have near-crippled an industry and threatened thousands of jobs.

“Trying to appeal the High Court’s ruling is an expensive waste of taxpayers’ money – the court says the Government has no realistic chance of winning, and it will prolong uncertainty among solar companies just when they need reassurance.

“Ministers should accept the High Court’s decision and end business uncertainty and protect jobs with a clear plan to reduce payments from February, in line with falling installation costs.

“The Government must expand the scheme overall – with all the tax revenue the scheme generates, this can be done at no extra cost to bill payers.”

To read the full article, click here.

The Feed-in Tariff Review

As we understand it, the Comprehensive Spending Review championing the government’s budget overhaul into spending includes a review of the solar FiT. The Department of Energy and Climate Change (DECC) is the authority on this matter, and only their official release will bring about the changes and outline to what extent cuts will be made.

One thing that figures from Ofgem are highlighting is that installation rates are much higher than what they anticipated. The current rates cannot be sustained at this exponential growth level. The boom is most certainly in full swing, and the bust now appears to be approaching in all its foreboding and unstoppable glory.

“Unless Earlier Action is Deemed Necessary”

The DECC, in speaking with industry sources has released the following statement:

“As we’ve previously said, all tariffs in the scheme are being considered in the Comprehensive Review and we will be consulting on proposals later this year. We’ve made clear that tariffs will remain unchanged until April 2012 unless the review indicates the need for greater urgency. There has been no announcement about the review so any rumors about its content are just that, rumours and speculation.” (Source)

In simple terms, nothing has changed at this point and we are no closer to understanding exactly when they will. The media storm has cracked through the sky, but the underlying realities of our situation remain. There is little doubt that the review will decrease the FiT rate by some extent, and also increasingly less doubt that the changes will be brought about before April 2012.

The only concrete truths the industry has to offer are that if you’re installed prior to the changes you will receive an enviable rate on your solar power for many, many years. If you do not, you won’t.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: 0844 567 9835

© Solar Selections Pty Ltd 2011

The Comprehensive Spending Review

The government carried out what they called a Comprehensive Spending Review in 2010 in order to take better control of government spending. The Comprehensive Consultation into the Feed-in Tariff was a part of this review, and is the official name for the solar FiT review. It is carried out to ensure that the funding being spent to promote the uptake of solar energy installations via the FiT is under control and at a manageable level.

Expectations

International experience has taught us a lot when it comes to government incentives for renewable energy installations, especially solar power on a micro-generation (>50kW) level. The most successful solar industries in the world of Germany, Spain and Japan are perfect examples of this and we can review their developments to aid our predictions. In all of these countries:

1. FiT’s were introduced and subsidised by the government to bring in solar uptake;
2. Reviews on the FiT’s were carried out on loose timelines to control the government’s spending;
3. The FiT’s were reduced over time and via these reviews in order to stabilise growth.

So by this example we can make one point clear;

1) A reduction in the FiT is by far more likely to occur than an increase or a continuation.

The second aspect we must consider is the degree of reduction we could expect to see.  At this point, it looks likely that the UK’s FiT reviews will be flexibly carried out to ensure the government reduces their risk in over-spending via the Comprehensive Consultation they have established. Whilst we have a rough date in mind, we need to analyse the uptake figures for a better idea on when to expect the changes.

Installation Figures of Solar Energy in the UK

The timing of the review

The government has stated that a review will take place upon a certain budget for the FiT being reached or if we reach March 31, 2012. Looking at the current uptake figures being offered by the regulator for energy in the UK, Ofgem, we can expect to reach 550MW before March 2012. This would very likely be a number surpassing the government’s budget, and we can then loosely establish our second important point,

2) The FiT review is likely to be introduced after November 2011, but before the end of March 2012.

Whether changes are brought about immediately or postponed until April 1st, 2012 is uncertain and depends on the government’s perception of the uptake and budget. Here at Solar Selections all we suggest is for people to educate themselves on their options, ensure they understand the returns and benefits for the solar installation and then proceed as soon as they feel comfortable.

The scale of the review

The other important aspect of the review when it does come around is the scale of the reduction in the FiT to expect. The growth of the market here in the UK is not expected to be sustainable for another year, so reductions between certain percentages can be expected.

3) The FiT cuts could be in the vicinity of 25% to 40% of the current tariff levels.

Only a cut of this magnitude could stabilise the spending that is at the forefront of the governments concern. Whilst such reductions would be damaging to the growth of the industry, they do serve as incentive for people to consider their options now and sign up for the 25 year indexed to inflation rates on offer.

The most important consideration with these three conclusions is that time is of the essence. We here at Solar Selections do not condone the pressured selling tactics that can be used in the industry to make customers feel forced into a decision without doing research. We do want to ensure that as part of a potential solar energy customer’s education they learn that if the review is changed and the installation incomplete, the new tariffs will apply and that they are likely to be significantly less attractive than what is available now.

In Conclusion, once a project’s feasibility and interest is established, any further delays in the decision making process serve only to expose the project to the risk of lower tariffs.

To establish your project’s feasibility and your own knowledge and interest, get in touch with us today for free, intelligent advice.

For the full article, please click here

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: : 0844 567 9835

© Solar Selections Pty Ltd

The price of PV (photo voltaic) solar panels has dropped by as much as a third this year alone. This has had a huge impact on the returns available for home owners turning to solar.And there is a boom at present as consumers try to install the low-cost equipment before the level of handouts via the government feed-in tariff (FIT) is reassessed in April next year.

Solar Century, a larger London-based supplier that also assembles PV equipment, says a large amount of its equipment is imported from China.Britain has come late to the solar party with government ministers preferring in the past to concentrate on wind power and only fairly recently trying to stimulate demand by offering subsidies to solar users.

This has meant PV manufacture has been concentrated in countries such as Germany and Spain where harnessing the power of the sun has been encouraged for many years.The US, and more recently China, have gradually latched on to the growing global market for solar and have been setting up factories in double-quick time.But the very low labour costs – and allegedly the very cheap finance available from state-owned institutions – has rapidly propelled China into pole position in the production of solar equipment.

The rapid build-up in capacity in the Far East is playing a major role in driving down the cost of panels, but it is also being blamed for a crisis at many German and particularly American rivals.Whatever the reason for solar manufacturers losing out, it should be easy to see a winner: the British homeowner. But it is also tough for consumers deciding which panels they should buy knowing any producer could out of business and shred any 25-year guarantee along with it.

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Energy and Climate Change Minister Greg Barker said, “I want to drive an ambitious roll out of new green energy technologies in homes, communities and small businesses and the FiT scheme has a vital part to play in building a more decentralised energy economy.

“We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency. Without action the scheme would be overwhelmed. The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities and will also further encourage the uptake of green electricity from anaerobic digestion.”

The new tariffs (below) will go ahead from August 1, 2011 and will apply to all new market entrants.

>50 kW – ≤ 150 kW Total Installed Capacity (TIC) - 19.0p/ kWh
>150 kW – ≤ 250 kW TIC – 15.0p/ kWh
250 kW – 5 MW TIC and stand-alone installations – 8.5p/ kWh

This effectively writes off large scale solar in the U.K. For a government that is attempting to be green this is a huge step backwards.

Greg Barker has ensured that for the same cost there will be less green energy produced. Here at solar feed in tariff we believe this is a terrible move for U.K policy.

Work will start next month installing photovoltaic panels on the roofs of two stands and the external wall of the south stand at Oakwell – enough to provide energy to for about 140 homes.

Electricity generated will be used within the ground, with any excess being fed back into the National Grid. It’s estimated it will save the club about half its electricity bills a year – equivalent to tens of thousands of pounds.

General manager Don Rowing said: “With energy costs spiraling and likely to continue that way it makes business sense to use the large amount of roof surface available to us to save the club money and also to reduce our carbon footprint.

“The icing on the cake is that the work is being done by a Barnsley company and that will help the local economy. This just shows what a green place Barnsley is and even though we are the Reds we can go green.”

Dodworth-based Solar Europa Limited is due to start work on the project, which is costing more than £1m, on May 9, with completion due in June. The panels on the south and east stands will generate about 0.5 megawatt of electricity.

The cost of the installation will be met by the company, which will recoup any money made selling electricity back to the National Grid via the Feed In Tariff.

David Hawkins, of Solar Europa, said: “I just hope that by doing this we can inspire other football clubs and other businesses to take advantage of the roofs they have. It could be a warehouse or office block roof – it doesn’t matter – it all helps cut bills and cut carbon dioxide emissions.”

Solar Europa, which manufactures its own solar panels, as well as installing them, receives business support from the Enterprising Barnsley programme.

Adrian Waite, who works for Barnsley Development Agency and Enterprising Barnsley, said: “Barnsley Development Agency provide business support to the football club and we introduced the benefits of solar power to the management team at Oakwell earlier this year.

“To their credit, Don and his staff realised the need to move fast on this opportunity, and a number of Barnsley based companies were invited to complete surveys.  We are delighted that Solar Europa has been selected for this high profile project.”

The Enterprising Barnsley programme offers business support to Barnsley businesses with growth potential. Enterprising Barnsley has attracted £2.89m investment from the European Regional Development Fund as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme. Enterprising Barnsley also runs networking events and provides office space throughout the borough.

For more information on Solar Europa go to www.solareuropa.co.uk

NOTE TO EDITORS

Don Rowing can be contacted on 01226 211300 or donrowing@barnsleyfc.co.uk or 07984 572739.

David Hawkins or his colleague Glyn Cooper can be contacted at Solar Europa on 01226 249852. David can also be contacted on david@solareuropa.co.uk

Adrian Waite can be contacted on 01226 787531 or adrianwaite@barnsley.gov.uk

Additional media contact: Kate Betts on 01226 766900 or 07910 165 444 or at kate@katebettsmedia.co.uk

Enterprising Barnsley is a partnership between Barnsley Development Agency, Barnsley Business and Innovation Centre and the University of Huddersfield ’s Barnsley Campus. It is funded by the European Regional Development Fund (ERDF) to provide an integrated programme of business support. For more information on Enterprising Barnsley go to www.enterprisingbarnsley.co.uk

Proposals to reduce the financial support available to larger scale solar-produced electricity have been published by the Government today as part of plans to protect financial support for homes, communities and small businesses.

The consultation follows the launch in February of a fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW after evidence showing that there could already be 169 MW of large scale solar capacity in the planning system – equivalent to funding solar panels on the roofs of around 50,000 homes if tariffs are left unchanged.

Such projects could potentially soak up the subsidy that would otherwise go to smaller renewable schemes or other technologies such as wind, hydro and anaerobic digestion.

Projections at the start of the scheme had shown no large scale solar under the FITs was expected until at least 2013.

Today’s consultation also covers proposals to provide added support to farm-scale anaerobic digestion given the disappointing uptake of such technologies to date.

Greg Barker, Climate Change Minister said:

“Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.

“I’m committed to an ambitious roll out of microgeneration technologies as part of the Coalition’s green vision of a much more decentralised energy economy.

“I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed in tariffs, rather than see that money go in bumper profits to a small number of big investors.

“These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers.

“Britain’s solar industry is a vital part of our renewables future and our growing green economy. The new tariff rates we’re putting forward today for consultation will provide a level of support for all solar PV and ensure a sustained growth path for industry.

“Taking a pro-active approach to changing tariffs will allow us to avoid the boom-and-bust approach we have seen in other countries and enable us to support more homes and community schemes, and a wider range of technologies such as wind, hydro and anaerobic digestion.”

As solar PV technology has developed, its costs have reduced, and are now believed to be around 30% lower than originally projected. This means the technology does not need as much support to be competitive.

The Government is therefore proposing reducing the support for all new PV installations larger than microgeneration size (50kW) and stand alone installations. The new proposed rates are:

• 19p/kWh for 50kW to 150kW
• 15p/kWh for 150kW to 250kW
• 8.5p/kWh for 250kW to 5MW and stand-alone installations

These compare with the tariffs that would otherwise apply from 1 April of:

• 32.9p/kWh for 10kw to 100kw
• 30.7/kWh for 100kw to 5MW and stand-alone installations

Such changes are in line with amendments made to similar schemes in Europe where in Germany, France and Spain tariffs for PV have been reduced sharply over the past year.

Alongside the fast-track review of solar, a short study has also been undertaken into the lack of uptake of FITs for farm-scale anaerobic digestion. The study suggests that the tariff for this technology is not high enough to make such schemes worthwhile. The proposed new tariffs are:

• 14p/kWh for AD installations with a total installed capacity of up to 250 kW
• 13p/kWh for AD installations with a total installed capacity of between 250 kW and 500 kW

These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500 kW.

Government policy is specifically to deliver an increase in energy from waste through anaerobic digestion, not to promote energy crops, particularly where these are grown to the exclusion of food producing crops. DECC is talking to Defra and others about the best way to implement controls to make sure this does not happen.

The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs will not be affected. Solar PV installations less than 50kW are not affected by this fast track review.

These changes are proposed to be implemented in advance of the comprehensive review of FITs, which is currently underway and will look at all aspects of the scheme.

***************

“Solarfeedintariff.co.uk believe the government has made a mistake in reducing their support of the U.K’s solar industry. Solar farms would have brought the country closer to its renewable energy targets much faster and more cheaply than roof top solar alone”

All that aside, the top-tier Chinese solar manufacturers are now producing high quality modules with lower costs than anyone else.  They have had a lot of experience with due diligence from European banks and are now pro-active in respect to quality control and bankability.  They are also beginning to invest heavily in R&D which will close the already small technology gap with Japanese and European competition.  Chinese solar manufacturers are integrating vertically in the value chain in a big way.  This means that for example cell manufacturers are starting to make wafers, silicon and modules etc. This gives them greater ability to control quality and improves margin retention.  They are also expanding downstream and bulking up sales teams in Europe with Europeans. This reduces the ‘fear factor’ of working with Chinese companies and taking revenue away from European wholesalers.  The strength of the big Chinese players is evidently putting a strain on its competition. If one had to choose between German or Chinese manufacturers as the most likely to be around in 25 years it would almost certainly be the Chinese.

It should be noted that there a number of Chinese manufacturers that do not have such high standards and should be avoided.  Many people in the solar industry are not convinced that the UK’s Microgeneration Certification Scheme is effective at weeding out these poor manufactures judging from the companies which have gotten through.  There are also lots of counterfeit modules  on the market now (for example fake Trina Solar and ET Solar modules are widespread) so its important to find installers with good checking procedures.

So does the rise of the big Chinese solar manufacturers damage the UK and make the Feed-in tariffs pointless, seeing as it will support the continued growth of unbeatable foreign competition?  I would argue that the only way to create growth in our manufacturing industry is to develop a domestic end-user market.  For a long time the UK has precious little in terms of PV manufacturing capability, which means that the strength of Chinese companies has little impact on us.  If we were not buying from China, we would be buying from elsewhere.   As the UK market grows, more people become engaged in the industry and start to look at product innovation.  Already there are a number of UK companies developing solar products specific to the UK market as a direct result of the introduction of the Feed-in tariff.

Furthermore, module manufacturing makes up only a small portion of the solar value chain.  Installing roof-top PV is highly labour intensive, and the feed-in tariffs will create a huge number of jobs in the badly suffering building services industry.  The fact that there are good quality, cheap Chinese panels available allows solar PV to be more competitive as a renewable energy source.  Costs are expected to fall rapidly over the coming years (as they have already) meaning that in around 5-6 years time the cost of solar electricity will be at par with retail electricity prices, which means the FiTs won’t be needed anymore.

Another point is that the big Chinese PV manufacturers will start doing the last manufacturing step, module integration, close to their markets.  This is because you can air freight solar cells, but you have to ship finished solar panels because of the glass (regular glass factories normally only serve a radius of 100km).  By doing module integration close to their key markets, manufacturers won’t have working capital tied up for 4 weeks and will reduce the risk of damage in transport.  Sharp already do this with a module integration plant in Wrexham, and we may well start seeing the Chinese companies open manufacturing plants in Europe, even in the UK, over the next couple of years which would provide an interesting boost to UK industry.

Eventually the playing field will level out again – China will get more expensive and there will be space for newcomers with new technologies, but for now the Chinese players clearly have the upper hand.