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A report released last week announced that the solar industry has grown worldwide despite the recession which has gripped economies. The report stated that the photovoltaic industry saw a 89 per cent increase through 2008, something which has been reflected through the first quarter of this year with the rise of investment in green technologies.

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.

Following up on Gordon Brown’s ‘Green New Deal’ pledge, the government has announced that it will oversee a complete upgrade of British housing in order to make homes greener. The targets set last month outline the government’s objectives to completely overhaul the way homes are constructed and also to upgrade all existing houses by 2030.

The ambitious targets of reducing the carbon footprint of homes across the UK will represent a massive overhaul not just of the way homes are built and invested in, but also of the mindset of homeowners and construction companies who will demand tangible benefits from any outlaying of money. While wall insulation is of course the best way of reducing heat loss through external walls, the government will seek to introduce a series of economic measures designed to make investment in all household green technologies a viable option.

Currently, one proposal is to offer low interest loans to homeowners and landlords to spur investment in property refurbishment in order to make homes greener. This option would be an effective way of reducing the heating efficiency of homes and enable the installation of smart meters which will be essential in the future as a way of monitoring energy usage and will be essential to manage feed-in tariffs (FIT).

Feed-in tariffs could prove to be an extremely effective way for the UK government to make homes across the UK greener. The tariffs, when introduced in 2010 will offer long-term contracts to those investing in renewable energy technology in their homes. The idea is to offer premium, fixed rates for energy fed- in to the national grid by small (under 5mW), renewable energy producers. The plan is that the tariffs will spark investment in technologies such as photovoltaic (PV) which will enable households to greatly reduce their carbon footprint by installing solar technology. The principle of the tariff is to incentivise investors by offsetting the obvious costs of investing in green plant and guaranteeing a yield on the investment of a long-term period.

Speaking on behalf of the housing association Peabody, Stephen Howlett commented on feed-in tariffs stating,

“Ensuring greater use of renewable energy through feed-in tariffs and the renewable heat incentive could offer real opportunities for us to create a package of carbon-reduction measures, based on financial models we have been working on for some time”.

The Federation representing Roofing contractors in the UK has lent its support to the We Support Solar campaign. The National Federation of Roofing Contractors (NFRC), along with a number of other key members of the industry have joined the campaign to assert the notion of a feed-in tariff which if implemented properly will be a powerful way of kick starting solar investment in the UK.

The feed-in tariff, currently in the consultancy stage with the government, if introduced would offer long-term contracts with fixed rates for electricity produced by small scale installations. In other countries such as Spain and Germany it has proved to be a successful way of enticing investment by offering reliable yields over a long period of time. In this way, the feed-in tariff would also help create a number of jobs and also lead to the growth of the green energy manufacturing sector.

Since Gordon Brown’s statements regarding the ‘Green new deal’ in which he expressed his ideas to help the economy through the development of a low carbon economy, there has been an even greater focus on the real viability of solar, particularly if helped by government legislation. Many members of the industry have therefore been keen to bring to the fore the necessity of a strong feed-in tariff offering rates which will make solar investment a healthy, viable alternative to fossil fuels.

NFRC are fully aware of the potential impact of photovoltaic technology (PV) on both roofing, and construction in general as more and more private and public buildings are built with solar panels and PV tiles.

“The NFRC fully support the need for a robust feed-in tariff to encourage the uptake of solar in the UK. The time has come for roofs to be active parts of a building to help meet the national CO2 targets, to provide a viable solution to meet challenging future building regulations, and to support a generation of new jobs for roofers who are eager to become involved in the emerging green economy. A strong FIT for solar will help tackle the triple challenge of credit, energy and climate,” commented Ray Horwood Chief Executive of NFRC.

As a solution to the global economic crisis, Gordon Brown has called for an international ‘Green New Deal’ in order to spark investment in new technologies and create jobs in the emerging renewable sector. In reference to F.D. Roosevelt’s economic plan to revitalise the US economy during the Great Depression the Prime Minister explained that he believes striving to evolve the UK in to a low carbon economy will create jobs while at the same time help the government to meet its climate change targets.

The British government has already set the target of an 80 per cent reduction in greenhouse gases by 2050 and have taken some measures to instigate this reduction. Overseeing this gradual change towards a low carbon economy will be the Secretary of State for the Department for Energy and Climate Change, Ed Milliband. The minister has already advocated government investment in renewable energy technology and research and was a key figure behind last November’s Energy Act which set out the main provisions for government funding for green energy and paved the way for the implementation of a feed-in tariff in 2010.

Despite these changes, some environmental lobbies and members of the renewable industry have criticized the government for not providing enough funding for green projects and not setting out a concrete breakdown of the feed-in tariff which will be necessary to attract investment as it has done for example in Germany. Spokesman for Friends for the Earth, Andy Atkins summed up the frustration in certain circles by commenting,

“We need urgent and decisive action, not more token gestures and hot air.”

Gordon Brown is confident that the green sector will provide some relief to the recession in the jobs that it creates, not just in the UK but globally and he was keen to make this point last week at a summit in London. The prime minister produced the results of an independent report which states that the renewable energy sector will generate around 400,000 new jobs within the next 8 years meaning that by 2017 1.3 million people will be involved in the renewable sector in the UK.

During his historic visit to Washington last week for his meeting with US President Barack Obama, Brown stated that it was imperative both for the economy and the environment that changes are made to the way governments approach renewable funding stating,

“We know that the more we are able to co-ordinate these measures internationally, the more confidence and certainty we will build and the more investment we will be able to bring forward.  That’s why I want to create a global ‘green new deal’ that will pave the way for a low-carbon recovery and to help us build tomorrow’s green economy today.”

Key to this shift towards a low carbon economy is the feed-in tariff which has already proved extremely successful where it has been implemented elsewhere. Members of the industry have already expressed the need for a tariff which is more than a token gesture and is able to attract investors through coherent, long term, viable contracts. Some have suggested that a rate of 50p per unit of kWh energy fed-in to the grid by renewable systems under 5 Megawatts would be sufficient to help Britain catch up with nations such as Germany where feed-in tariffs are now well established. The feed-in tariff rate is crucial as it will offset the cost of producing energy by renewable means by offering investors long term contracts with fixed rates for their megawatts production.

Andy Atkins of Friends of the Earth, regarding the summit and the need for government action on tariffs and project funding added,

“Today’s summit is an encouraging development, but ministers must grasp the scale of the challenge we face. We need urgent and decisive action, not more token gestures and hot air”.