A conservative MP calls for an end to inefficient tariffs, Branson calls in the ‘green’ troops after salvo from anti wind MPs threatens renewable’s future, and Lego invests in offshore wind farm for the future of children.

It’s been an interesting week for renewables. Seemingly receiving little support in Chancellor George Osborne’s budget, now it seems everyone who is anyone in business, politics and the energy sector is rallying and having their say.

Analysis of the budget focuses on the fact that Osborne has given a real boost to the gas industry and fossil fuels sectors rather than renewables, which seems to fly in the face of the Conservative’s own aims to be the greenest Government ever. A group (calling themselves the 102 Group) consisting of Sir Richard Branson, Dale Vince and Caroline Lucas have written to David Cameron urging him to recognise the importance of renewables, provide more support for new technologies and asking for a planning system that recognizes the value of a move to local energy.

Raab calls for an end to inefficient tariffs

Conservative MP Dominic Raab, in an article written for the Telegraph newspaper, has called for an end to what he terms the green “boondoggle”, asking the Government to overhaul the energy tariffs and subsidies systems that were introduced by the last Labour Government.

Lego acquires offshore wind farm

In a move to supply all of its energy requirements from renewable sources, toy maker Lego, famous for manufacturing primary coloured building blocks for children, has bought half of a German offshore wind farm from DONG Energy. The wind farm will have 77 3.6MW wind turbines once it is finished.

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Still in Turmoil after Latest Court Decision

Last week, the Court of Appeal ruled in favour of the High Court’s decision (made earlier in January 2012) that the UK Government’s attempt to cut the Feed-in Tarriff (FiTs) subsidy before the end of its consultation period was illegal.

Rather than accepting the decision as final, however, DECC is considering its options – including lodging an appeal with the Supreme Court.

Many in the UK Solar industry are worried it will lead to many more months of second-thoughts and tentativeness from home and business owners thinking of installing Solar.

In a report on www.businessgreen.com last week, Energy and Climate Change secretary Chris Huhne is quoted as saying:

“……we cannot rule out the possibility that lower tariffs could be applied to installations which became eligible for FiTs on or after the proposed reference date. It is important consumers are aware of this.”

A Government spokesperson stated that the Government is very clear that from the 1^st April 2012, all tariffs will be 21p/kWh.

Last November, DECC announced that as of the 12^th December 2011, the Feed-in Tariff would be reduced to 21p/kWh on all installations, thus throwing the UK Solar industry into chaos and resulting in cancelled contracts, redundancies and bankruptcies.

Legal action was announced when Friends of the Earth, Homesun and Solarcentaury got together to take the Government to court over its decision. In December, the High Court ruled against the Government’s decision. DECC then mounted an action with the Court of Appeal, which was also unsuccessful.

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Majority of Renewable Energy Association’s members think tariff should be cut by 25%

So, there is still no clearer harmony over FiTs after the landmark legal victory in December 2011.

Since the Government’s announcement in December that it would slash the tariff for small-scale solar projects (up to 4kW in size) from 43.30/kWh to 21p/kWh, the industry has delivered a backlash of angry protest as installers have had contracts cancelled and companies have had to close or make serious redundancies.

But it would seem, from comments in the press by Gaynor Hartnell, the Chief Executive of the Renewable Energy Association, that there is disharmony in the industry. Hartnell responded to the high court decision by warning that the impact of the ruling could further increase instability.

The high court found that the proposed cut to the Feed-in Tariff Scheme for solar power by the UK Government in the middle of a consultation period was unlawful. The case had been brought by environmental organisation Friends of the Earth alongside solar groups. Following the ruling, DECC (Department for Energy and Climate Change) lodged with the Appeals Court and a hearing has been set for this Friday (13^th January).

I think it’s sad that it has come to this. It’s clear that the Feed-in Tariff scheme, which was meant to benefit individuals, small-scale energy users, schools and community projects has been exploited and often misdirected. In my view, there are faults on both sides (the Government and the industry). At the end of the day the ones who are suffering are individual energy consumers, who are missing out on the benefits of harnessing solar power and generating their own electricity, but the ones who are suffering the most are the honest, hardworking installers whose very livelihoods are being jeopardised.

I do believe, however, that the industry will bounce back. It has too much momentum behind it now to fade away and there are too many advantages solar power can offer (separate to the FiTs scheme), which is what the industry has to focus on now rather than relying solely on FiTs – irrespective of the Court of Appeal’s decision.

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The UK government has merely loosened the head collar but it hasn’t yet killed the beast.

There is plenty of life left in Solar but the industry needs to build business models centred on delivering real value and market the many benefits of Solar installations rather than simply relying in subsidies from the FiTs scheme.

There was serious industry backlash against the UK government’s latest announcement of a massive cut in feed in tariff for Solar energy on schemes up to 4kW in size, from 43.3p per kWh down to 21p/kWh, earlier this month.

Chief Executive of the Renewable Energy Association, Gaynor Hartnell, was reported in the Guardian as saying that she did not believe the department for energy and climate change was winning its argument with the Treasury on the benefits to the economy of renewables. She is also quoted as stating that the government chopping and changing its mind like this and not honouring its commitments (this is the second major cut this year) was undermining confidence in the industry as a whole.

Other industry experts quoted in press articles within hours of the announcement were stating that thousands of contracts had already been cancelled and some Solar companies had started laying people off and making redundancies.

I’m in two minds about this. Firstly, cuts to payments under the FiTs scheme will make some people think twice about Solar installations, but unfortunately much of the subsidy has already been diverted to large commercial energy companies rather than individual home owners or public sector projects as it was initially intended. In my mind the Government should have acted sooner and made a much clearer distinction between the different market sectors. Spending controls are unfortunately now a necessity.

Every fledgling industry needs a helping hand but there comes a time when it should be able to stand on its own two feet. Perhaps that time for the solar industry is now.

There are many benefits and reasons why residential or commercial customers should invest in solar technology. FiTs is just one of them. Alongside the many ‘green’ issues, an other benefit is security of supply and having more control over your energy supply and usage; solar customers can at least rest assured that they can generate energy for their own needs at times when mains electricity may be unavailable. And with talk of possible energy rationing at some point in the future and political unrest globally, that benefit is looking increasingly attractive. Once payback has been achieved, Solar energy is always going to be less costly than many other sources – or even free in certain circumstances.

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