FIT changes leave large solar projects in the cold

18th April 2011

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The UK's solar sector has severely criticised the government for proposing dramatic changes to the feed-in tariff (FIT).

Organisations from the renewable energy sector condemned the government for failing to prepare the sector and crippling future solar projects after DECC published proposals to substantially reduce remuneration for solar photovoltaic (PV) installations larger than 50kW.

Dave Sowden, chief executive of the Micropower Council, said: “While a review of large field-based solar projects was expected, the fast-track review of the whole FIT scheme has come as a bolt from the blue for the rest of the sector.

“The proposed tariff changes to projects over 50kW will result in the collapse of the rooftop solar market. School installations, community projects and virtually every aspect of the built environment market, outside of residential projects, will disappear.”

Organisations from the sector claim the changes could threaten thousands of potential jobs. Ken Moss, chief executive at mO3 Power, said: “A buoyant solar power sector would have stimulated at least 90,000 jobs if the feed-in-tariffs had remained where they were.”

Ray Noble of the Renewable Energy Association, agreed. “This is an absolute disaster, no new projects will start if this proposal becomes law. This industry has been strangled at birth. The huge number of envisaged new jobs will disappear,” he said.

Energy minister Greg Barker confirmed that the proposals are aimed at ensuring incentives reach domestic installations, rather than large-scale solar farms.

Sowden, however, argues that the government’s failure to manage expectations could cost the economy billions. “When the government changes its policy on renewable-energy schemes with no warning, investors’ perception of regulatory risk is increased and this could result in a demand for a greater rate of return. An additional 1% increase could cost £2 billion.”

The proposed changes are subject to consultation, but if approved the new tariffs will apply from 1 August.

Impact on Cornwall’s economy

The government’s proposed changes to the feed-in tariff (FIT) are particularly worrying for the Cornish economy, which has seen an explosion of interest in solar energy after the scheme was announced in April 2010.

“As the county with the highest levels of solar irradiation in Britain, we have received massive levels of interest from potential solar projects. We’ve already granted planning permission on eight projects, but if the government proposals come into effect I believe only one will go ahead,” Tim German, renewable-energy and partnerships manager at Cornwall Council, told the environmentalist.

German, who has been discussing the proposals with energy and climate-change secretary Chris Huhne and Rachel Solomon Williams, DECC’s newly appointed head of the FIT scheme, argues that large-scale solar projects that feed money and skills back into the local community can offer greater benefits than just domestic installations.

He is, however, unconvinced that the consultation will result in any changes to the proposals. He said: “There is a lot of opposition to these plans in Cornwall, but in my view the government made up their minds in advance of this consultation and these proposals will happen with no changes.”

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