It can come as no surprise that the Department of Energy and Climate Change lost the feed-in-tariffs case (Report, 22 December). No matter what the motivation, you cannot make changes prior to the close of a consultation period. However, after the celebrations or commiserations, ministers will hopefully take the opportunity to address the two fundamental problems that still exist: lack of a sufficient budget to support this growing industry, and a proposed structure that disadvantages smaller companies.
The decision to decrease the percentage return on solar photovoltaic to single figures is sensible and expected. However, to base these rates on budget levels calculated as part of the comprehensive spending review, set in November 2010, is out of line with the current economic picture. Since the decision was taken last year to create a fixed budget for the tariff, the government has changed its overall strategy and now recognises the need to inject funds into the economy to stimulate business and create jobs. The emerging renewable energy industry is showing sustained growth, with companies investing millions to satisfy the growing demand for solar microgeneration, creating thousands of new jobs. This is now in jeopardy.
Second, one of the fastest-expanding industry sectors – small businesses installing solar PV – will be squeezed out of the market if the government’s plans on linking feed-in tariffs to energy efficiency measures goes ahead. Most SMEs are specialist installers not geared up to install energy-efficient measures such as cavity or solid-wall insulation. Only larger companies who can invest in the infrastructure necessary to offer a total installed solution would be able to cost-effectively operate in the marketplace.
If the model set out in the consultation goes ahead, the industry will no longer be one dominated by SMEs. It will unfairly favour large organisations which can offer a far more diverse package of products. The sustainable energy industry is one of the few success stories where performance is going in the right direction. With a little care and foresight, it will gather momentum and stimulate economic growth, while contributing to energy security.
Director of renewables and sustainability, Grafton Group