Temporary respite for cuts to solar PV tariffs?
Yesterday's High Court Appeal by the Government regarding solar PV tariffs back-fired big time. It was a resounding victory for the solar industry led from the front by Jeremy Leggett's SolarCentury. While it's not 'set in stone' yet (Chris Huhne is seeking an appeal to the Supreme Court) it would appear that some in the industry do feel this verdict gives them the confidence to advertise based on the original tariffs and rekindle PV projects that were put on ice following the 12th December deadline. But they need to act fast..!
Unfortunately confusion reigns right now but this is our understanding of the timescales for those considering a solar PV project.
The original rates available before 12th December MAY apply (eg. 43p/unit for less than 4kW projects) provided you register your project before 3rd March - but this is far from certain (as of end of January 2012) as Chris Huhe at DECC is currently threatening a further legal challenge that could jeopardise this. If you haven't done much yet this gives you little time! If you register your project between 3rd March and end of March you may get the old tariff rates until the end of March but you then move automatically to the new tariff rates from April onwards which are approximately 50% less. If you register a project after the end of March you qualify for the new rates.
As tax payers, DECC have just spent over £58,000 on legal fees to get this far and that doesn't include legal fees of 'the winners' which they may have to pick up or the fees to take it to the Supreme Court. Talk about wasting our cash...how many more times do they need to hear it?
This all matters for the relatively limited proportion of potential customers that are in a position to get a project done quickly..and can find a PV installer that has sufficient resources to do the job (given they've probably shed a lot of their staff in the last few months). However what really matters is the medium and long term health of this industry and this is all a storm-in-a-tea-cup in comparison.
While I have the greatest respect for Jeremy Leggett in taking the fight to the Government on this he does seem to over-egg the implications. Will this restore solar PV as a thriving sector again? In our view its unlikely. It should give it a temporary shot in the arm but, if Chris Huhne is to be believed, the implications of having higher rates in the short-term could be even lower rates come April.
We believe the Government is unlikely to raise the current FiT budget cap to meet the potential solar PV demand. So, if the Government is committed to the solar PV industry (and this is certainly questionable right now), then it needs to set up a new dedicated Solar PV scheme (the 'Solar PV Incentive') with a much fairer form of budget from core tax revenue. This would be much like the Renewable Heat Incentive. Or, alternatively (and frankly much more likely), it needs to build in clear support for solar PV into it's Green Deal and have a transition period between April and October to ensure the industry stays healthy.
If homeowners and businesses could implement solar PV through a Green Deal loan, then pay-off the installation costs over 10 years from energy bill savings, this could be a very attractive idea. It also gets round the problem that people move house and don't want to commit to a long-term investment.
What a huge mess! The sooner the industry, investors and, most of all, consumers get some clarity the better. If the government believes solar PV is an inappropriate technology in UK latitudes because the subsidies required to make it attractive are not affordable then it should clearly say so! But, before they do, they really need to consult their crystal balls to see whether PV technology prices could change over the next 5 years making it directly competitive with other forms of energy generation. If that's the case they will miss a massive opportunity.