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The £1 plan garnered cross-party support from over 30 MPs from all parties yesterday at an action outside the House of Commons including Sir David Amess MP (Con), Mims Davies MP (Con), Kevin Hollinrake MP (Con), Caroline Flint MP (Lab), Caroline Lucas MP
The £1 plan garnered cross-party support from over 30 MPs from all parties yesterday at an action outside the House of Commons including Sir David Amess MP (Con), Mims Davies MP (Con), Kevin Hollinrake MP (Con), Caroline Flint MP (Lab), Caroline Lucas MP (Green), Callum McCaig MP (SNP) and Tom Brake MP (Lib Dem). Photo: STA.
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Back our emergency £1 solar rescue plan

Sonia Dunlop / Solar Trade Association

22nd October 2015

Massive government cuts in solar 'feed in tariffs' threaten to wipe out our highly successful solar industry, writes Sonia Dunlop - and all to save £1 year off our fuel bills. Yes, that's all it would cost to keep the sector in business, employing tens of thousands of expert solar installers all over the UK.

No technology other than solar empowers consumers to take control of their energy like solar power, nor has the potential to transform choice and competition in electricity markets, reducing costs for consumers.

The British solar industry is fighting for its survival and it needs your help. High profile solar companies are folding or planning to leave the UK.

So if the Government is to secure the British industry it must act quickly. And it's not to cost a fortune - quite the reverse!

Our emergency plan would add just £1 to household bills by 2019 from next year, demonstrating just how affordable it is to adopt sensible reductions in support for solar power.

The alternative - decimating the British industry - will waste huge public support to date, cost an estimated 27,000 jobs and set the UK apart from an international tide of technology change, consumer empowerment and economic opportunity.

Government's own figures show their extreme Feed-In Tariff proposals will decimate the British solar industry and result in just £7 million of expenditure on solar power from 2016-2019 [1].

Per annum, this would represent a 98% reduction in total resourcing for solar power compared to this financial year. As a nation we would actually spend less on solar power - the technology experts agree will dominate world power supply - than Bucks County Council will spend fixing potholes this year [2].

Parliament must act to save this thriving industry

We are looking to Parliament to secure a sensible approach to the British solar industry commensurate with its internationally recognised strategic importance. We hope the proposals we have developed will attract cross-party support.

Already a broad range of companies and business organisations are expressing support for the solar cause - and not always the ones you might expect. It's Ben van Beurden, CEO of Royal Dutch Shell who said: "I have no hesitation to predict that in years to come solar will be the dominant backbone of our energy system, certainly of the electricity system."

And it was John Cridland, Director General of the CBI, who pointed out: "Today, 164 countries have renewable energy targets. That's 164 potential markets worldwide for the UK's renewable industry." While Steve Holliday, CEO of National Grid, argues that "From a consumer's point of view, the solar on the rooftop is going to be the baseload."

The British solar industry has delivered unprecedented cost reductions and it is close to achieving parity with grid electricity prices. But it is not there yet. Bizarrely, Government proposals will derail the industry at the last hurdle and waste public investment to date.

As former energy minister Greg Barker put it: "We mustn't grab defeat from the jaws of victory... [if the proposals go through] it will be pretty catastrophic. You would kill the industry in the UK and set it back several years."

Based on the Government's own Impact Assessment we estimate their proposals will cost around 27,000 jobs across nearly every constituency of the UK and force companies into closure. Sun Edison, one such company, expressed it well: "We are extremely disappointed that the draconian policy proposals made by the Government in August will essentially eliminate the solar PV market in the UK."

Our economy will also pay a further heavy price in lost opportunities: major G8 economies are not only ramping up solar power deployment, but they expect international competitive advantages as a result of driving solar below the cost of fossil fuels [3].

Just £1 per year on electricity bills to keep our solar industry

According to DECC, solar currently adds £9 a year to household energy bills [4]. It is difficult to estimate the cost of the current domestic boom precipitated by the current extreme cut proposals (and the STA warned against this approach). However, we have modelled an emergency package to stabilise the solar industry that, from next year, will add just £1 to consumer bills by 2019.

We urgently need cross-party backing for our emergency proposal which needs to be adopted quickly to avoid further unravelling of the industry and of the efficiencies it has achieved to deliver lowest-cost solar installations. Our emergency proposal comprises four main elements:

  • Investible: Higher initial tariffs set to provide minimum investable returns (8p domestic to 4p stand-alone)

  • Fluid markets: Higher flexible caps that will not result in damaging industry stops and starts

  • Cost control: Automatic and deployment based degression of tariffs that provide cost control to Government while providing the forward visibility necessary for industry investment and cost reduction

  • Inclusivity: enabling all sectors of society to continue to invest in solar power

Scenarios

Additional deployment 2016-2019 (GW)

Maximum liability in 2019 (£m)

Consumer bill equivalent (£)

STA £1 Plan

2.7

£95m

£1.09

DECC proposal

0.6

£7m

£0.08

DECC 'do nothing'

3.2

£250m

£6


From next year, the STA £1 plan would add just an extra £1.06 on average household electricity bills per year in 2019. Crucially it will ensure that families, farmers, housing associations, businesses, local authorities and community groups can continue to participate in the shift to clean energy.

This emergency plan is not ideal - we continue to recommend our Solar Independence Plan which reflects the previous Conservative Ministerial ambition of achieving 20GW of solar capacity by 2020.

However, our emergency plan will help to secure an adequate level of solar deployment to prevent industry supply-chains unravelling, but further non-FIT measures will also be needed if British solar is to thrive:

  • Adoption of credible Zero Carbon Building measures by CLG to incentivise solar in new build

  • Resumption of CfD auction rounds, with appropriate adaptations for SMEs

  • Alignment of commercial sector energy regulations to incentivise solar investment via the current HMT Business Energy Tax Review [5]

  • Removal of grid constraints.

Don't back a false-economy for consumers and UK plc

Government claims the British solar industry can operate without support and that their extreme cuts are essential to safeguard the Levy Control Framework. Neither claim stands up to scrutiny.

The government's own Impact Assessment shows their proposals will not sustain a viable solar industry and several independent analyses show different UK sub-markets in solar will reach parity with fossil fuels around 2020 [6].

Key reasons that projected spend under the LCF has increased include lower wholesale electricity prices and freezing of the Carbon Floor Price, but this will not increase energy bills (which is what matters). Furthermore the beneficial reductions in wholesale electricity prices driven by solar power should feed through to lower consumer bills.

Finally, no other technology empowers consumers to take control of their energy like solar power, nor has the potential to transform choice and competition in electricity markets, reducing costs for consumers.

Anti-solar is anti-consumer and against the international trend of active consumer empowerment in electricity markets.

 


 

Sonia Dunlop is head of press for the Solar Trade Association.

Call on your MP to support the British solar industry.

More information:


References

1 Figures calculated by STA based on data in the DECC proposals and IA.

2 Bucks County Council.

3 For example, the USA's SunShot initiative aims to drive solar below the cost of gas electricity by 2020 and the program is ahead of schedule.

4 Written answer 8603 11th September by Andrea Leadsom to Paul Flynn MP.

5 Government consultation on reforming the business landscape.

6 For example see the STA's Solar Independence Plan, KPMG, and Thema1's parity analyses.

 

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