As the solar industry feared, DECC confirmed yesterday that it is halving feed-in tariff (FiT) payment levels for domestic installations. This is a major setback for the nascent solar industry, which is still finding its feet in the UK. We’ve yet to see the scale of job losses and business closures that will come, but for those entrepreneurs who have worked to create jobs, and for the people they currently employ, it will be a difficult time.
It remains to be seen if the effect of the FiTs cut will bring the deployment of small scale solar to a complete halt in the UK. If it does then we’ll lose the one initiative that promised to democratise and decentralise energy production. While the financial gains were clearly worthwhile for the individuals who invested in the technology, I believe we will forego much bigger gains for society.
Having a personal power station on your roof is something that puts you in touch with energy, possibly more than anything else. You become familiar with kilowatt-hours – both producing and consuming them. The energy that you produce is more precious than the power from the grid. You want to make the most of it. Just two weeks after having our own system installed, setting the washing machine to come on in the middle of the day has become normal behaviour. My teenage children, who used to ignore my threats of dying polar bears every time they left a light on unnecessarily, have now started turning off lights around the house.
Large-scale renewables, like offshore wind, have their place and deserve their subsidies, especially as we live in the windiest country in Europe. But there is nothing personal about offshore wind energy. For many, it’s out of sight and out of mind. Solar is personal.
I think I now better understand why Germany has rejected nuclear power. It is a country that has embraced solar energy for more than four decades, thanks largely to the innovative thinking of Herman Scheer, the architect of Germany’s original feed-in tariffs. Almost 400,000 German homes generate their own power from solar. I can only imagine that the widespread engagement with renewable energy on a personal level creates a broad and powerful cultural shift.
In the grand scheme of the UK’s economy, the amounts of money involved in incentivising the uptake of solar are trivial. It’s disappointing that the Government’s treasury didn’t share sufficiently in the vision of a UK success story to keep the cuts to a level that would allow the industry to continue to grow.
It’s also disappointing that the critics of renewable energy continue to ignore the facts when it comes to subsidies. According to the London-based research group Bloomberg New Energy Finance, Governments subsidised renewable energy sources to the tune of $46 billion in 2010. Meanwhile, the International Energy Agency (IEA) claims that the global direct subsidies to fossil fuels amounted to $557 billion in 2008 – more than 10 times the subsidies for renewables. Incidentally, the subsidies for fossil fuels are on the up.
Next week the IEA will publish its World Energy Outlook 2011 report. Its analysis is that unless we act urgently and boldly the door for a two-degree trajectory (i.e. limiting the rise in global temperatures to just two degrees) may be closing. In retrospect, the few hundred million pounds that the Government is going to save by cutting the FiTs may have been a bargain.
