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Spending review: a solar industry view

Posted by Howard Johns on 21 October 2010 at 10:07 am

Well it is the day after the spending review and I can’t help feeling the renewables sector has been very lucky. The Feed in Tariff (FiT) will remain and we are going to have a renewable heat incentive (RHI). After months of campaigning and ups and downs the waiting game is over and the solar industry gives a sigh of relief!

For the last few months the sector has been on tenterhooks awaiting the outcome of this process. The mood has been rather worrying with the official mantra of “we can’t say anything until the spending review” creating concern for all involved.

It all started with the cuts to the Low Carbon Buildings Programme (the support scheme for renewable heat technologies) in the first week of the new government. Then they forgot to include the renewable heat incentive in the coalition agreement, and finally rumours over cuts to the feed-in tariff. All this has led to a tense few months with diverse groups coming together lobbying in support of both the feed-in tariff and renewable heat incentive. Many thanks to Friends of the Earth, We Support Solar, Micropower Council and all the other groups who lent their voices and political clout to the process.

So it’s brilliant! Now we just need to get on and install the stuff. However, a few questions still need answers. The announcement said: “Feed-In Tariffs will be refocused on the most cost-effective technologies saving £40 million in 2014-15. The changes will be implemented at the first scheduled review of tariffs unless higher than expected deployment requires an early review.”

Refocus on the most cost effective technologies and higher than expected deployment are probably targeted at the solar PV industry and we will have to quickly establish what the “higher than expected deployment” might be, so that we can understand whether we are getting close to triggering a review.

The picture for renewable heat is less clear but very positive: “£860 million funding for the Renewable Heat Incentive which will be introduced from 2011-12. This will drive a more-than-tenfold increase of renewable heat over the coming decade, shifting renewable heat from a fringe industry firmly into the mainstream”.

This represents a really good win for the renewable heat sector but the devil is always in the detail, and whether solar thermal is well supported may still be in the balance – the NERA report which was slammed by industry still seems to be their main source of analysis on the sector. The coming months will require more work to ensure the message of solar thermal is well understood and broadly supported.

All in all it is very positive. I for one am very relieved that I can get on with my business and that the members of the Solar Trade Association will have a bit less to worry about moving forwards. This sets the scene for us all to work together and deliver an energy revolution – really giving power back to the people.

Greg Barker, who has been a long term supporter of the renewable industry, said this morning: "I appreciate that there has been a degree of uncertainty and hiatus that has been the necessary result of the horrendous deficit we were handed by the Labour government… But green businesses can now invest in confidence and look to this government as a partner in helping them to deliver growth."

Thanks Greg!

About the author: Howard Johns is the founder and MD of Southern Solar Ltd and a director of the Solar Trade Association.

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