The early review of the UK solar feed-in tariff has caused consternation within the industry, still in its infancy and reliant on the tariff for log term viability. Chris Huhne, Secretary of the Department of Energy and Climate Change made the announcement this week that the FIT would be reviewed in light of the “threat” to the scheme posed by large scale solar projects which have begun to take advantage of the scheme. This combined with the recent spending review which will make it necessary to cut 10 per cent from the tariff rates.

The feed-in tariff was introduced as a means of attracting investment in solar energy and greatly increasing uptake in solar pv panels in the UK. The tariff works by offering guaranteed, premium rates for units of energy both consumed and fed back into the grid for small scale renewable energy producers. This tariff has been very successful at attracting investors and manufacturers alike, all keen to tap into the revenue which can be generated from the feed-in tariff. However, Huhne believes that the feed-in tariff has perhaps been too attractive with a number of large solar farms developing under the system. The DECC secretary stated,

“Since the Spending Review, I have become increasingly concerned about the prospect of large scale solar PV projects under FITs, which . . . could, if left unchecked, take a disproportionate amount of available funding or even break the cap on total funding,”

Solar Trade Association spokesman, Howard Johns lamented this news saying,

This is really bad news for the solar industry in the UK. Last week Ministers welcomed the study showing that 17,000 jobs would be created by the industry in 2011. This week has seen them once again changing the goal posts and threatening investment and jobs in the sector.”

A survey carried out by the Solar Trade Association (STA) has reported a massive drop in sales in solar panels in the last few months. The STA, a body which represents photovoltaic installers, manufacturers and suppliers has stated that since the arrival in office of David Cameron’s Conservative government business has dropped off considerably.

Paying particular attention to solar thermal installers, the STA findings have shown that since early May around 50per cent of these installers have reported a 75 per cent reduction in new business, figures which are likely to have resonance across the renewable energy sectors.

Spending cutbacks have been the prominent feature of the new coalition government and these spending cuts have certainly been felt in the solar energy industry according to the STA’s findings. Concepts such as the ‘Green New Deal’ are also being harmed with a sharp fall in green jobs across the country. Indeed, the STA report found that 65 per cent of its members were considering leaving the industry temporarily during these hard times with 7 per cent considering leaving permanently.

Chairman of the STA, Howard Johns said,

“We have a new Government which claims to be the greenest Government ever, yet in its first days it has caused severe setbacks in what is otherwise a buoyant sector. Removing grant support for solar thermal and giving no clarity on new incentives has severely hit a sector that will provide many green jobs and lots of renewable energy with the right support behind it.”

The withdrawal of certain schemes for solar thermal such as Renewable Heat Incentives and the Low Carbon Building program grants have been in stark contrast to solar PV where feed-in tariffs have seen investment and installation go from strength to strength. First introduced under the guise of the Clean Energy Cash back scheme, it highlights exactly how crucial government incentive schemes are in kick starting renewable energy take up in the UK.