What the coalition is doing on solar power and why you should care

There’s jobs and growth in renewables, we just need a clear path to get there.

There’s jobs and growth in renewables, we just need a clear path to get there

Last week the government announced some big changes to the support schemes for solar power.

Some of these were expected, others less so. But what do they mean for the industry, and for the UK’s renewable energy transition?

Renewables in the UK have been growing strongly, but people are getting nervous about the future. The mood music from government is inconsistent, ranging from cautiously positive to downright hostile, and it is not going unnoticed. The UK has fallen to seventh in the Ernst and Young index of most attractive renewable energy markets.

There are plenty of other places to invest, and with Asia blazing ahead, there is a real risk that the UK finds itself left on the margins.

This will cost us jobs, investments, and make decarbonisation more difficult and expensive. It means that we will simply end up buying in expertise and technology from the rest of the world, rather than developing it ourselves. It will delay the huge benefits in energy security a renewable system would bring.

In that context yesterday’s changes are a mixed bag. The bad news is the confirmation that the Renewable Obligation will be closed to large scale solar.

Everyone knew this was coming, but it still hurts. From now on all solar installations over 5 MW (essentially solar parks) will need to bid for contracts (called ‘contracts for difference or CFDs) from limited allocation rounds ‘Contracts for Difference’ (CfD) are expensive and complex to apply for work better for bigger operators, and after going through the process there is no guarantee that you’ll receive a contract.

This tips the field in favour of big energy companies, and away from new market entrants and communities. The ‘energy establishment’ may not like renewables much, but they can see which way the wind is blowing (or sun is shining), and are keen to maintain the upper hand.

The good news is that funding available for the 2015-16 allocations under the CfD has been increased slightly. This is certainly a boost, but still leaves onshore wind and big solar fighting over a pretty small budget – enough for just 1000MW of solar or 625MW of onshore wind. By comparison the former Minister Greg Barker claimed to want 20 GW of solar alone by 2020.

It also raises the question about the size of the allocations in later years. Will they be the same size, or will they reduce as they come up against the nominal cap in spending? The prospect of a shrinking industry is not one designed to encourage investment.

We are at a crossroads. In a few years’ time solar could be cheaper than fossil fuels, and employing tens of thousands of people. Using just 15 per cent of roof space suitable for solar could generate as much electricity as six current nuclear power stations, and could be deployed with less cost and in a fraction of the time.

That is a huge prize. But it needs a stable pathway from government to get there. At the same time offshore wind could make the UK a renewable electricity power house, but it too needs scale to support the supply chain, the ports, the factories and the research that will push down prices.

We have had a glimpse of the potential transformation offshore wind could bring to cities like Hull, but if we want to see more of that the industry needs to see demand which reaches into the middle of the next decade and beyond, starting with a firm commitment to a high level of ambition for offshore wind.

Already there are concerns that the money in the Levy Control Framework – the nominal cap on support spending for renewables – is all but spent. Without intervention we could see a declining market for offshore wind towards the end of the decade, and a solar industry held back by government indecision.

Government must act now, with simple policies and sufficient funding, (to ensure that by 2020 we have ramped up wind and solar) and brought down costs. We also need to see solid commitment to decarbonisation by 2030 for the long-term certainty that creates factories and jobs in Britain, and the willingness to invest in the infrastructure necessary to get us there.

In the short term, removing funding from unsustainable biomass could free up much needed money to meet the shortfall in the pot for offshore wind and solar.

There is huge inertia in the energy system, and constant scrambling for compromise. Last week’s changes are just a tiny symptom of that. The challenge for the government is to stop playing both sides.

The challenge for Labour will be to seize the opportunity that is presenting itself, and commit the resources necessary to drive Ed Miliband’s commitment to decarbonise power by 2030. Clear targets and a stable framework to get there will see costs come down faster than the current stop-start approach.

There’s jobs and growth in renewables, as well as the clean electricity we desperately need to tackle climate change. We just need a clear path to get there.

Alasdair Cameron is a renewable energy campaigner at Friends of the Earth

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17 Responses to “What the coalition is doing on solar power and why you should care”

  1. Godfrey Paul

    More green [email protected]

    What a waste of money !!!

  2. swat

    The only way you’r going to get people to take up eco solutions is tomake it compulsory, ie all future new build will have them integrated, and we offer real incentives for old build to convert to eco solutions. That means the Govt has to lead and set things in motion. They could do that by increasing the duty on fuel and energy tariffs, if people don’t convert. We take lead free for gratnted these days, because TINA; and thats the way to change hearts and minds, a choice of take it or leave it and get mothing.

  3. godfrey paul is stupid

    Ignorant fools like Godfrey, educated by the daily mail, reinforce a negative perception of solar despite the obvious benefits. Dearly me, that’s why we lag behind Germany in just about everything, because of the idiots scared by anything ‘new’

  4. blarg1987

    No doubt if other methods of energy production do not work as expected you will be the first one bleating about how incompetent government is for not investing in renewable energy?

  5. Leon Wolfeson

    Raising prices on the poor and discouraging house building are bad ideas.

    Solar Water Heaters make economic sense at our lattitudes, too, but not Solar PV (yet). Moreover, there should be no hidden subsidies for costs like load balancing.

  6. Leon Wolfeson

    And you’re ignoring nuclear power again.

    Offshore wind is also massively, massively expensive and will absolutely hammer the poor for little return. You must also count net jobs and the economic effects of the massive bill rises you are demanding, not just gross jobs, etc.

    CfD’s are picking winners in very nasty ways, they manage to be worse than the RO system, which is a hard thing to do. RO’s have lead to building wind farms with high nominal ratings, but low capacity factors – which is bluntly silly – because the energy firms know they can dump 100% of the cost onto their customers and make record profits.

    We should be moving *away* from empowering the big companies directly
    like that and to a carbon-tax based system. (And yes, counting
    manufacturing carbon)

    PS, “security” in a system without sufficient base-load power involves security for less than 100% of people, your “smart meters” will need to cut the poor off during peak usage periods.

  7. blarg1987

    I see where you are coming from on one hand, however PV is probably better for most people. PV can be used to heat water for evening use then any additional energy returned to the grid which generates money.

    Problem with solar heating is that once you have heated up your water, you can’t export anything else to the grid so in effect wasting the additional hot water that has been generated.

  8. Leon Wolfeson

    Better for people to pay for things they’ll never get their money back on without subsidies? Which screws renters, since they pay without seeing significant benefits?

    Solar Hot Water also, as you note, does not and should not attract the grid balancing charge Solar PV should.

  9. Christina Macpherson

    Very important article.
    Writing as an Australian, I hope that you Brits don’t let your country become a climate pariah, like mine is. We were the earliest to develop solar technology. We had the chance not only to lead the way in action on climate change, but also to develop successful 21st Century renewable energy industries.
    Our government, puppet of the fossil fuel and nuclear industries, will probably follow UK’s lead, in the dishonest spin about nuclear power combating climate change. (Ha ha, our Tony Abbott government has to postpone that for a while, as they don’t believe that climate change is real!)
    Anyway I hope that the UK public wakes up to the economic reality that renewable energy is the future cheap and clean electricity, and don’t let the government put it over you – the way our government has, helped by the Murdoch media

  10. Leon Wolfeson

    Oddly enough, your climate isn’t like ours.

    And no surprise you lash out at nuclear energy and hence the poor. Cheap for the energy companies (thanks to the poor paying through the nose), cleaning the rich’s cash, very part-time power.

  11. blarg1987

    Not necessarily true, you can have a set up, whereby certain things are activated once certain amounts of energy is generated or the energy is transferred to different applications.
    For example you can set it up to heat hot water first, then once that is at temperature, the additional energy is used to power the washing machine, or pumped into a storage heater in a room.
    These both require electricity to operate, which solar heating would not do.
    This maximises the use of PV, which would bring the cost of it down, compared to solar hot water.

  12. swat

    … and Local Community Energy generation schemes must be the order of the day.
    Thats where the local economy will benefit … and not those shareholders and French EDF.

  13. Rob Titherley

    You are all wasting your time arguing about the technology. Renewable tachnology is a given. It’s here now and it’s still going to be here in 10 years at less than half today’s price. Human ingenuity is working hard on that faster than you realise unless like me your job involves working on it all day every day. Your children will be unable to understand why we didn’t implement faster. Coal is the enemy, gas is interim, nuclear is poison, renewables are the destination. Nano technology based fast charge lightweight super capacitor batteries that will stabilise baseload supply and power all cars are round the corner.

    We in the industry only have one problem and that is politics driven by the fossil fuel industry. The Tories are anti-renewables as are UKIP – well Farage is – the rest of them probably have divided opinions. Labour has a positive renewables policy and strong support withing its ranks from sound politicians like Caroline Quinn and so do the Lib Dems.

    The Tories have been ruthless. They populated the Department of Energy and Climate Change with Lib Dems and then Osborne starved them of funding. Somehow they managed to get rid of the best pro-renewables man we could have wished for, Chris Huhne, and Greg Barker has walked away after bravely trying to walk the middle ground. As far as the solar industry is concerned DECC has been set up to fail. Who better to take the blame than your minority coalition partner?

    The only way renewables is going to meet the targets in this country is if Labour or a Labour/Lib Dem coalition comes to power. I express no opinion. I’m just making the facts clear having been directly involved for over three years full time.

  14. Leon Wolfeson

    The further devices you need for that are expensive. And not included in the smart meters being forced onto people, which are a crude shutoff device.

    It will take 20+ years to pay back many Solar PV installs, and it’s still bill-subsidy dependent. That might change in the future, but right now it is as it is.

    Also, solar water heaters are perfectly capeable of i.e. feeding hot water into washing machines (Indeed that’s arguably one of their best uses – and takes care of the largest cost-component of a wash!).

  15. Leon Wolfeson

    Oh yes, clean energy is poison. When it’s your children’s day, the issues might have been solved, but they are not *now*, and you’re screwing other people and their kids out of heat and light.

    In your plan, we get stuck with gas for a generation.

  16. Guest

    So massive new subsidies for “communities” (of the rich, who can afford it), at the expense of bill-payers.

    Rather than reform the market to break up the vertical companies.

  17. Dakiro

    you could decarbonise 100 % of power in up to 10 years by building new types of nuclear power plants. A similar replacement has been done before in France and other countries and can be done again. As to the comments against nuclear – coal industry likes solar well enough, it knows solar and wind will never be able to replace all carbon based fuels. Nuclear could do it, though.

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