On October 31st 2011, the government dealt a major blow to jobs in the green economy. The solar feed-in tariff(FIT), a scheme that rewards homeowners and businesses who invest in solar power, is to be cut by over 50% from 43.3p per kilowatt hour (kwh) generated to 21p per kwh.
Following the introduction of FIT, there has been a huge rise in the proportion of electricity generated in the UK from solar power. The government’s own statistics show that in 2006, 11 Gigawatt hours (Gwh) were generated but by 2010 that had trebled to 33 Gwh (see note 1). This programme has therefore created many jobs and saved tonnes of CO2 from entering the atmosphere.
To justify slashing the FIT rate, Gregory Barker MP the Minister of State for Energy and Climate Change says, in his ministerial statement; “we know that the costs of an average PV system have fallen by at least 30% since the FITs scheme started”.
Solar panel prices have fallen but not by the same proportion as the minister plans to reduce FIT. The government is therefore depressing demand and reducing growth in this growing sector (at a time when most sectors are seeing negative or, at best, static growth).
In response to today’s FIT announcement, Juliet Davenport, Chief Executive of Good Energy, a provider of 100% renewable energy, says: “We’re concerned that these changes show that the Treasury doesn’t have a real grip on the economics of the energy market, and in particular the value of energy generated in the UK compared with the energy we have to import from abroad. Make no mistake – as a result of these cuts, fewer people will become microgenerators and the prospect of a stable energy future for Britain looks ever more distant.”
November 9, 2011