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A crazy end to a crazy year for solar PV

Posted by Howard Johns on 23 December 2011 at 4:01 pm

2011 has been a crazy year to be working in PV in the UK. Massive growth in the sector, 2,500 new companies, 100,000 installations, huge cost reductions and three reviews of the feed-in tariff (FIT) scheme; with the most recent proposing to shut the industry down to 5 per cent of what it has been this year and calling it sustainable. One of the most disturbing bits of this last consultation is the fact that the changes were implemented on the 12th December – 11 days before the consultation period closed.

Understandably this last proposal created a lot of anger and there has been a huge response from a wide range of groups across society – everyone from the CBI to the National Trust. The coalition that has come together to defend the FIT has been amazingly diverse, and united with one message: this is no way to treat any sector as it destroys confidence.

This week things took an interesting turn in the Royal Court of Justice, where Friends of the Earth, Solarcentury and HomeSun won a case against the Government about the implementation of changes to the FIT scheme before the consultation had closed. The Judge ruled that it was illegal to make a proposal about something that would be 'unlawful' and; ruled it is 'unlawful' under the Energy Act for the FITs to be changed retrospectively.

That means that any change in FIT rates must follow the process set out in the energy act. This states that the proposed changes have to be laid before parliament for 40 days. As any changes can't be laid until after recess, rates cannot change until 19th Feb 2012 at the earliest.

The Judge refused the Government permission to appeal due to no reasonable prospect of success. Despite this, it is the Government's stated intent to appeal anyway. The Judge prescribed that if the Government wants to appeal it must do so with urgency - with all papers filed for the case by the 4th Jan 2012 and it is expected that the case would most likely be heard within a week.

So we are in limbo. In theory we are back to square one with the rates are back to what they were pre 12 December. However, we will not be able to say that unless the Government is not granted an appeal or loses an appeal hearing.

Hopefully this will all become clear by about 11 January, and at that point we can say with certainty what is going on here. The Judge did not push for a new consultation. The one that closes today (23 December 2011) is still valid, without the reference date of 12 December. But if Government loses the appeal we will be back to the old tariffs, probably until mid February.

So, a crazy end to a crazy year. Most unbelievable (or shocking) is that the Government put out something that was potentially unlawful in the first place. You would have thought they had better sense.

The solar industry is being branded as the problem here. The “goldrush”, the “double digit returns”, threatening “the budget cap”. But let’s be clear: this industry has grown in response to Government policy. This Government's DECC ministers set “the budget cap” with no consultation with industry (not previous Labour ministers); DECC had the power to alter the scheme earlier – it chose just try to kill of one section of the scheme (large scale) to keep the rest moving.

In the face of all this industry has been running a campaign called “Cut Don’t Kill”. We are not opposed to tariffs being cut as prices have come down – but we simply cannot accept cuts that knock the industry down to 5 per cent of what it is this year.

It seems what is behind all of these problems is a lack of ambition from DECC for solar in the UK – which is totally opposed to what the people want – 73% of the population in a recent YouGov poll want more solar. Many have voted with their money and now have solar on their homes. So we enter 2012 in limbo once again – but what is clear there is a huge appetite for solar in the UK, and that ministers will have to dig deep and find the means to get us on a sustainable path to grid parity.

Photo by Abi Skipp

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

If you have a question about anything in the above blog, please ask it in the comments section below.

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1 comments - read them below or add one

Explore Solar

Explore SolarComment left on: 5 January 2012 at 2:20 pm

The government should have though out things better and I agree with the comments.

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