Last Friday (24^th September) news broke on the Coalition government’s decision to back down on their promise of retroactively granting the feed-in tariff to 6000 ‘pioneers’ who installed PV before the feed-in tariff was announced.  This is undoubtedly unfair since those pioneers were responsible for keeping some semblance of a UK PV industry alive in recent years whilst the industry was booming elsewhere in Europe.  In light of the government’s austerity measures however, I do not consider it an outrage that these few people are denied the FiT.  Early adopters of renewable energy are unlikely to be in the lowest paid income bracket and at a time when many public sector workers face redundancy the government can argue that they have more pressing issues to deal with.

What is concerning however, are unconfirmed reports that the government is thinking of changing of lowering the feed-in tariff before April 2012.  This would be extremely unwise.  Feed-in tariffs are a success because they offer investors (whether banks or families) some foresight as to how much they stand to make. Solar panels are very much a long-term investment, and feed-in tariffs work because you can predict how much you will earn in year 25 of the investment as well as in year 1. Therefore, by changing the planned feed-in tariff degression schedule at short notice, investors lose confidence very quickly. How can a homeowner plan to have a PV installation when the feed-in tariff could be lowered in a month? How can a PV installation company forecast its installation schedule and hire someone if the feed-in tariff is to be changed next month?

Feed-in tariffs are designed to be significantly reduced every year – that’s to reflect decreases in the installed cost of PV systems and ensure that investment returns remain broadly consistent. Everyone knows that the feed-in tariff in the UK is due for its first degression in April 2012, but suddenly changing that schedule will disrupt innumerable business plans and threaten jobs. The feed-in tariff is designed to be decreased, I have absolutely no problem with that, in fact it probably didn’t need to be as high as it is to start with. The problem is only with unscheduled decreases as these cause havoc with the industry.  The UK already has an extraordinarily tiny PV industry in comparison with other major European countries.  By threatening to deviate from the planned degression schedule only 4 months into the scheme threatens to de-rail the beginnings of an industry that could employ tens of thousands of people in the UK.  Already this year the number of installations has dramatically increased as a result of the feed-in tariffs. However, the UK is forecast only to install around 15MW this year. This pales in comparison to Germany’s expected 8GW – its a factor of 500 difference!!

It is possible to build in flexibility into a feed-in tariff policy that controls market growth without causing surprises. In Germany, the annual feed-in tariff degression is now tied to the market size in the previous year. That means if the market is over a certain size then the degression will be more than normal, and if the market is smaller than targeted the decrease for next year will be less.  The UK government have not said anything about their intentions for April 2012. They would be well advised to start thinking about it now, rather than waiting until the last minute as they did before the feed-in tariff was introduced.  Using the German model, feed-in tariff policy could be set until the next general election, this would stand the UK in good stead.

No-one wants a boom-and-bust industry. The UK government should take measures now to reassure the industry that it is following an organised and planned strategy.  Rumours of sudden changes, whether real or imagined, could do more damage than many realise.

News of spending cutbacks have made depressing reading over the last six months as the government is seeking to rein in spending as a way of controlling spiraling national debt. Health, education, policing and defence have of course been at the forefront of controversy regarding spending reviews and the inevitable consequences which arise as a side effect. Now it is unfortunately renewable energy’s turn to feel the squeeze as some call for cut backs in green energy incentives.

At a time when all members of the coalition government are bemoaning cupboards barer than those of Old mother Hubbard it is perhaps not particularly surprising that Energy Secretary Chris Huhne has been urged to safeguard investments in British renewable energy.

The feed-in tariff which was introduced back in April works by offering guaranteed, premium rates for energy produced by small scale renewable generators. While Huhne has come out and said that, “There is no money left”, he has at least until now talked a good game about supporting green energy in this country. Feed-in tariffs have been absolutely crucial in solar pv taking off in the UK and the future success of UK solar undoubtedly relies on the existence of a strong tariff scheme.

Fearing cutbacks which would cause irreversible harm to burgeoning UK renewable energy businesses, Friends of the Earth (FOE) have carried out their own report designed to show that maintaining and encouraging a strong renewable energy industry has distinct advantages for the struggling e News of spending cutbacks have made depressing reading over the last six months as the government is seeking to rein in spending as a way of controlling spiraling national debt. Health, education, policing and defence have of course been at the forefront of controversy regarding spending reviews and the inevitable consequences which arise as a side effect. Now it is unfortunately renewable energy’s turn to feel the squeeze as some call for cut backs in green energy incentives.

At a time when all members of the coalition government are bemoaning cupboards barer than those of Old mother Hubbard it is perhaps not particularly surprising that Energy Secretary Chris Huhne has been urged to safeguard investments in British renewable energy.

The feed-in tariff which was introduced back in April works by offering guaranteed, premium rates for energy produced by small scale renewable generators. While Huhne has come out and said that, “There is no money left”, he has at least until now talked a good game about supporting green energy in this country. Feed-in tariffs have been absolutely crucial in solar pv taking off in the UK and the future success of UK solar undoubtedly relies on the existence of a strong tariff scheme.

Fearing cutbacks which would cause irreversible harm to burgeoning UK renewable energy businesses, Friends of the Earth (FOE) have carried out their own report designed to show that maintaining and encouraging a strong renewable energy industry has distinct advantages for the struggling economy.

Campaign director for FOE, Craig Bennett said,

“It’s absurd that the Treasury is even reviewing FIT payments because the scheme isn’t financed by taxpayers, and there is already a planned review in two years time. Huhne must stand firm and allow councils, communities and businesses to benefit from green energy revolution.”

The real benefits of feed-in tariffs will be put into perspective in a couple of years when we are able to retrospectively assess the growth of UK renewable investment and uptake compared with our European counterparts. While there are some who may argue that a cash strapped government could better spend its money elsewhere, it is hard to deny that a strong green energy industry would be a vital both for revitalising the economy and helping homeowners make savings on utility bills.

Hamburg based solar specialist. Centrosolar has opened a UK subsidiary as a way of tapping into the now lucrative UK solar market. Buoyed by the introduction of the feed-in tariff back in April, the UK has attracted growing interest from investors at home and abroad looking to take advantage of the tariff’s offerings.

Centrosolar are a company well known in Germany for the production of both crystalline high performance solar modules and thin film modules designed for roofs not able to take weightier systems. With UK product certification now granted, Centrosolar is looking to ship its products from their plant in Wismar, Germany to the UK where demand for solar systems has grown exponentially through the summer.

Centrosolar are more than aware of the positive affects which strong incentives can have on renewable energy and in particular, PV. Germany has been one of the world’s leaders in solar energy uptake over the last ten years thanks to the strong tariff legislation which has attracted investment in its renewable industries.

With a view to twinning German solar engineering with local market knowledge, Centrosolar have recruited Simon Gerrard, former Head of Sales for Solarcentury to run its UK operations. With daily news updates reporting on the ever-growing success of the UK feed-in tariff, it is very likely that not only will Centrosolar build a strong bridgehead, but others are likely to follow suit before too long.

An article published in the Financial Times last week has vividly highlighted just what effect the recently introduced feed-in tariff has had on the UK solar industry. The news that record numbers of people have decided to install solar panels is largely due to the feed-in tariff legislation which offers installers a healthy return on investment, off-setting the costs of buying and fitting the kit.

The figures published in the FT last Tuesday taken from Ofgem state that this month alone, more than 2,200 homes have fitted solar panels compared to 1,700 last month and 1,400 in June. Indeed, with figures that more than 6,600 households have installed solar panels since the introduction of the tariff system it is good evidence that this incentive scheme could herald the beginning of a boom in the UK solar industry.

Unsurprisingly, The Financial Times paid particular emphasis to the obvious financial rewards associated with solar installation rather than environmental benefits. With the case example of John Keown, a company director who invested in solar through a scheme offered by British Gas, a good case was made for the long term viability of solar PV projects.

Keown will be set to reap the benefits of solar energy installation with expected returns of £1000 per year through savings on electricity bills and revenue from the tariff. Keown for example has estimated that since he installed his solar panels in April he has made £289 from the feed-in tariff. He stated,

“I haven’t gone into self-produced energy to be green. I’ve gone into it because I think it’s a good financial saving, perhaps even better than having an Isa account.”

Certainly, it seems to be growing in the public consciousness that the installation of solar panels to households is more than just a green fad or something which can bring about negligible carbon footprint reductions. The high rates of return which can be achieved through solar panels is likely to attract investors exponentially in the future as word catches on that sourcing and installing a solar system doesn’t have to be painful process.