The future of solar
Today (November 25, 2015), the Leader of the Opposition, Jeremy Corbyn, used Prime Minister’s Questions to ask five of his six questions about the Government’s energy policy. He expressed concerns that the reduction in subsidies, especially solar, will result in job losses, will stop local authorities investing in green energy, will not achieve environmental targets, and will dispel the myth that the last Conservative Government was the greenest government ever. He also re-iterated the criticism levelled by the UN Chief Scientist that the UK is going backwards in terms of renewable energy
In responding, the Prime Minster appeared to give an amber warning to the Energy Secretary saying that the Government wanted to promote green energy. Later, the Chancellor, in his Autumn Statement, announced that renewable energy support would double. He told the House of Commons: “We are committed to the low carbon sector and we show our commitment to the Paris talks next week. But we believe going green should not cost the earth.”
Last week, The Energy Secretary, Amber Rudd, ‘reset’ energy policy in a speech last week. She set out the Government’s priorities with a focus on “keeping the lights on” and minimising the cost to the consumer. Although she did not mention solar in her speech, it was the death knell of the solar industry. So, what now?
Earlier this year, she referred to the solar industry as a “great British success story”. Quite rightly so, in just five years, it has delivered over 9GWp of new clean energy, it has generated 30,000 new jobs and costs have been reduced by two-thirds making solar tantalisingly close to being the first subsidy free energy technology.
Amber Rudd’s speech was made against a backdrop of a surge in worldwide solar. Many leading energy experts, such as the International Energy Agency, have noted that solar is on track to become the dominant source of energy worldwide and one which can provide cost effective variable and baseload in the future, particularly when combined with wind and storage. It would be extremely disappointing, perhaps somewhat ill-advised, for the indigenous UK solar sector to be decimated at the very moment when other global markets are set to grow significantly.
The Government is, however, currently ruled by the Treasury. It is about to make a sudden and drastic withdrawal of support for renewables through both the Feed-In Tariff and Renewables Obligation. These cuts are justified solely on the basis of saving costs for ‘hard working families’ despite solar actually making up only a tiny element of consumer energy bills. This also reflects the political motivation here following the significant public concern over energy bills a few years ago. Labour gained much support for its proposed energy policy and the Conservatives are adamant that they need to be seen to be looking after the interests of the people in this respect and not big business.
It seems that the Government is happy to see the sector flounder. This will involve significant job losses, as are already happening, and the obvious advantages of continuing with solar and the export and international trade opportunities all being lost.
It is very different to the rhetoric used for new nuclear investment, which is already more expensive than solar but which is celebrated for being an exciting technology, generating thousands of new jobs and providing energy security. Although that is true, it is many years away whereas solar is here now, deliverable in scale, and cheaper.
This is important as the strategy behind the Government’s new policy is also security of supply. But the withdrawal of solar support comes at a time when there is growing pressure on the UK’s energy supplies. Only last month, the National Grid asked large energy users to curtail use or switch supplies as there was a significant electricity supply issue. This, when we have not gone into the winter yet, suggests the margin between supply and demand is dangerously tight.
Similarly, there is significant concern about the impact of this policy on the Government meeting its carbon reduction targets, and ahead of the United Nations Climate Change Conference in Paris next week. The Energy Secretary confirmed in a leaked internal memo to Cabinet that the UK will miss its 2020 CO2 emissions target by a quarter, laying the country open to not only ridicule from abroad but legal action from the EU and the industry. The Met Office confirmed the seriousness of the situation, confirming earlier this month that average temperatures across the world have risen by one degree since pre-industrial times: half way towards the two degree “gateway to dangerous warming”.
The solar industry is currently lobbying the industry to not cut the subsidies, to provide that small additional help to enable the industry to go subsidy free by 2020. The Solar Trade Association have calculated that for just £1 extra on annual fuel bills, this could be achieved.
Considering all the arguments, continuing the subsidy seems eminently sensible. The time for solar is now. If the Government pulls the plug, there is no future for solar in the UK, and no going back.