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10 Feb 2011 01:02:04

Solar industry reacts angrily to govt's FiT review

Solar industry reacts angrily to govt's FiT review
Members of the solar energy industry have reacted angrily after the extent to which the government's Feed-in Tariff review could damage the industry was revealed.

Energy secretary Chris Huhne said earlier in the week that the review would look at how the development of "large-scale installations", namely solar farms, could affect the scheme.

However, it has since been revealed the research will encompass any installation capable of generating 50KW of power, including those fitted on buildings and rooftops.

Solar energy experts are now warning the review could have a serious impact on the industry and undermine investor confidence.

"It has taken the new government just seven short months to undermine what by their own admission has been a successful programme to date," Jeremy Leggett, executive chairman at Solarcentury, told Business Green.

He added installations of 50KW are generally considered to be medium-scale, describing the government's classification as "total nonsense".

Gaynor Hartnell, chief executive of the Renewable Energy Association, expressed similar concerns, saying developers will be left "hanging in the air".

The government said any changes made following the review, which was originally scheduled for 2012, will not be applied retrospectively to existing installations.  ADNFCR-1235-ID-800397217-ADNFCR

Discussion Thread  

11 Feb 2011

Here are some key arguements supporting this article:

From a financial perspective:

• The FIT subsidy is 41.3p/kWh for domestic installations v.s. 29.3p/kWh for larger installations – therefore for every unit of energy produced, domestic PV costs almost 30% more than commercial-scale PV. As the FIT budget is capped, incentivising smaller more expensive PV would result in up to 30% less PV installed than if the focus was commercial scale PV. We don’t recommend changing any PV tariffs, large or small, but if the purpose really is to improve efficiency, penalising the most efficient subsidies which deliver more renewable solar energy per pound spent, will not help us to meet our 2020 targets!

• A focus on only small-scale installations will prevent the reduction in prices delivered by economies-of-scale offered by deploying larger systems, ensuring that prices stay higher for longer (forcing subsidies to remain for longer).

• International inward-investment opportunities will be significantly reduced if the UK is no longer perceived as an interesting (and safe) market for PV/renewable energy investment. This will happen if the maximum size PV plant eligible for the FIT is 50kW.

• Countless UK Green jobs will be lost if mid-scale PV is significantly penalised.

• World-leading international UK Solar PV companies (such as the very successful German PV companies currently setting up joint venture companies in the UK) will fail to develop in the UK without the market conditions offered by mid-scale PV opportunities. This will also prevent any meaningful solar PV export businesses developing in the UK.

• North sea oil and gas is declining sharply, and globally fossil fuels are becoming increasingly expensive. Over the useful life of a PV power plant (can be up to 50 years), PV is a low cost option, and is insurance against rising fossil fuel prices.

In consideration of additional benefits offered by mid-scale PV:

• Solar PV provides reliable low carbon decentralised power to local areas. Even in low-light conditions this technology can be 100% relied upon (v.s. other more intermittent renewable energy sources such as wind power which is not reliable on a daily basis).

• Mid-scale PV reduces the requirement for fossil-fuel derived electricity on the grid in high demand daylight hours, reducing carbon emissions and also preventing the need for additional spinning reserve capacity.

• Mid-scale PV does not require costly, and lengthy enhancements to the grid-infrastructure in order to be deployed, hence lower costs and much faster implementation.

• FIT legislation has been created to help the UK meet its 2020 commitments. Favouring less expensive (mid-scale) installations will ensure that the UK’s solar PV contribution towards the 2020 target is maximised.

• The UK is currently forecasting brownouts by 2016 (only 5 years away). Solar PV is one of the fastest-to-deploy renewable energy technologies which in conjunction with energy efficiency has the potential to significantly contribute to our energy security challenges. Every 5MWp Solar farm can produce enough electricity for up to 500 homes per year, or the baseload energy for over 3000 homes in daylight hours.

• The FIT is the only mechanism driving the adoption of mid-scale PV in the UK. If this is changed, there is no other policy that will continue the development of mid-scale PV. This is completely at odds with global policy such as the recently introduced US DOE Sunshot initiative www.eere.energy.gov/sunshot, designed to drive down prices to grid-parity and rebuild the US as the dominant force in the PV industry. We can also make this happen in the UK, but not if the FIT policy for mid-scale PV is changed.

• The UK needs Green Growth – in the UK Solar Sector growth is abundant – the policies work so please don’t change them and destroy the seed of what is currently destined to become the next big UK success story!

15 Feb 2011

May I suggest a bit more examination of the un-subsidised benefits of equipment that can be written off against tax liabilities under current UK tax regulations and also produces an income which rises with inflation, at present 4% p.a !

I am working with a UK consortium to install Solar PV above supermarket car parks, given that they can benefit as noted above, and are considerable electricity users in summer for air conditioning and refrigeration. This to me would seem to a better application than "Solar fields" which just feed the grid at considerable expense to the taxpayer - if FIT is applied.

There are some 1.8 million+ car park spaces in UK, at about 2 kWp each.= considerable potential

As regards installations for non profit concerns, eg domestic & hospitals, someone should be able to devise some financial packages which take advantage of the depreciation, and inflation benefits noted above ?

Discussion Thread  


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