The Government has ambitious and legally-binding carbon reduction targets. Unemployment is reaching record levels and new skilled employment opportunities are in short supply. Electricity bills are rising and people are looking for ways to cut their bills.
These are three reasons why we have a scheme, the Feed-in Tariff, that rewards people for putting solar panels on their roofs. The scheme allows them to get paid (at a pretty generous rate) for all the electricity that they produce (whether they use it or not), whilst also helping them to cut down on their electricity bills.
The Government should therefore want to do all that it can to promote the scheme and help support a growing, but still embryonic, renewable energy industry in this country.
But even beyond those high-level policy reasons, we know how keen people in Hackney and across London are to take real steps to reduce their carbon footprint at home and cut down on electricity bills. They tell us. They want to make changes.
And yet, this may be the last few weeks when customers can be absolutely assured of installing solar panels and receiving the Feed-in Tariff. So what’s going wrong?
Late last year, the Government announced its proposals for a major and rapid reduction in the Feed-in Tariff subsidy. That reduction was only a proposal, subject to ‘public consultation’. The consultation was set to finish on 23 December with the proposed change due to come into effect on 12 December.
In case you’re wondering, those dates are correct. The Government really was proposing retrospectively to reduce the tariff from a date falling before the end of the consultation – in other words before allowing people to be properly consulted. That would have meant that people installing solar panels in the second half of December and beyond would have had their Feed-in Tariff reduced after they had had their panels installed. The financial impact was stark – halving the amount people could earn from their panels and doubling the amount of time it would take their investment to pay for itself.
The Government’s reasoning was that the rate of solar installations was so high that all of the Feed-in Tariff budget was in danger of being used up if they didn’t act urgently.
Friends of the Earth and some solar companies successfully challenged the proposal in Court, demonstrating that the Government was not allowed to make (or even to propose) retrospective changes. I watched the Government argue and then lose in both the High Court and the Court of Appeal. It is proposing to take its appeal to the Supreme Court.
The effect of the Government’s ongoing legal wrangling has been to cause chaos across the industry. In November, hundreds of thousands of people rushed to have solar panels installed on their roofs to beat the changed tariff. Many companies were forced to let down customers, as stocks across the country dried up within days. It is also likely that the quality of installations will have fallen in many instances – with potentially serious long-term consequences.
Customers remain hugely confused about whether they can expect to receive the higher or lower Feed-in Tariff rate, and many have been deterred from installing, explicitly blaming the policy uncertainty. Some solar installation companies have already ceased to trade and many green jobs have disappeared.
In addition to the above, the Government is proposing yet more changes from the end of March that will make it very difficult indeed for people to secure the Feed-in Tariff at any rate at all. Last chance saloon for many enthusiastic carbon reducers.
All this is a huge shame and a massive lost opportunity for the UK. Right now we really need locally based, skilled, long term green job opportunities. We also need to do everything we can to encourage people to make their homes more energy-efficient and reduce their domestic climate impacts.
Despite all the above, we and many other excellent local companies are looking forward to helping people reduce their carbon footprints for many years to come. If only the Government would help.
Phil Michaels is a Director at Joju Solar/ 9 March, 2012