Solar industry starts and ends year with uncertainty
Posted by Howard Johns on 23 December 2010 at 8:39 am
It feels as if the solar industry has been on a real rollercoaster during 2010. This was the year where we were finally meant to have an end to the stop start funding of the various grant schemes that have supported the sector in the past and move into the 21st (solar) century with the launch of a feed-in tariff (FIT), and progress on a renewable heat incentive (RHI).
We started the year with no clarity over the feed-in tariff, and it was not until about a month before it launched that we actually knew the figures. It has been amazing to watch the massive claims of the many new companies and offerings entering this backwater solar market during the last year. We have had the PV for free schemes, and gone all the way to the industrial solar blight taking over all of our fields. Quite a journey for one of the EUs smallest PV markets.
Actually we have had a good level of growth this last nine months from 8MW of installations last year to 40MW so far this year, but this is not Spain, and it is still minute compared to the 1,500MW deployed in Germany last year alone.
Unfortunately just when the solar party had started to really get going we were once again thrown into turmoil. The new "greenest government ever", slashed the support for renewable heat technologies in its first week (LCBP RIP), and then we had the shadow of the spending review, threatening to squash the then awakening PV sector too. It was not much fun for those of us planning and growing businesses in this sector.
But the spending review happened, and renewable heat incentive got a reasonable allocation of tax payers money for the next four years (£860m), and the feed-in tariff survived – or so we thought.
Actually it turns out that they have moved the goal posts. Both the renewable heat incentive and the feed-in tariff were meant to be considered outside of taxation, so that they were not constantly under budgetary review. It became clear after the spending review that this is no longer the case. The feed-in tariff now has a fixed budget.
Once more we have a case of PV just being too successful, and even though there is NOT ONE field scale solar park in the whole of the UK – the now budget-limited feed-in tariff will be spent by all these huge developments which are about to spring up – so must be reviewed.
So we end the year as we began, with huge uncertainty over the feed-in tariff. One thing is looking pretty certain: a review of the feed-in tariff will be announced in the new year, which will no doubt have a negative effect on the market. And we still have no idea what the renewable heat incentive will look like, how it will work and many other things besides. Perhaps we will find out all in January.
My Christmas wish is the same as it has been over the last nine years; a policy framework that doesn’t change every six months at the whims of the officials.
If you have a question about anything in the above blog, please ask it in the comments section below.
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