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The Solar feed-in tariff controversy

Two contrasting articles on the subject:

Solar feed-in tariff U-turn marks another betrayal by the 'greenest government ever'No renewables company or investor will easily trust this government again

Jeremy Leggett

In numerous conversations with ministers since the comprehensive spending review, I was assured that any review of the UK's solar photovoltaic (PV) feed-in tariffs before April 2012 would not happen unless installations exceeded a certain published level and would exclude urban solar PV, tackling only the green field solar farms. The government has not only betrayed those assurances, but today proposes feed-in tariff rates that will ensure the UK PV industry stalls.

More than 40 countries have chosen to build their renewable energy industries via a feed-in tariff: a levy on energy bills that reduces over time, on particular dates flagged to the market well in advance, as costs fall in the industry created by the tariff. The details of the UK's "ambush" review of solar are arcane, but the core problem is that at the rates the government proposes for every installation above a mere 50 kilowatts, those once considering solar roofs will be put off en masse.

Property developers and companies whose premises have large roofs will take a quick look at the diminished returns and say no. Many of the energy co-operatives being set up around the country will no longer be able to persuade enough citizens to go ahead. Solar investment funds being set up will hand money back to investors – they had already started to do so even once the risk of today's announcement had become clear a few weeks ago.

In announcing this sabotage, ministers make a mockery of their own supposed core objectives: local empowerment within a "big society"; massive job creation – via a green industrial revolution – to counter austerity-related job losses; desire to be the greenest government ever; tackling global warming, and so on. Rather than putting them on track to fulfil their rhetoric, the proposed tariffs add to the growing evidence that this will be not the greenest but the meanest government ever.

The total cost of the PV tariff to date has been less than 1p a month on domestic bills and the total feed-in tariff spend is running way below the government's projections. Meanwhile thousands of new green jobs had been created, and the Treasury had already begun benefiting from the increased tax and national insurance income. All of that has been debilitated at a stroke.

Feed-in tariff review is good news for small-scale solar power investors
If an upper limit is set on eligibility for feed-in tariffs, it will prevent the budget being guzzled up by large-scale solar farms

Kevin Frea

The recent announcement of a review of feed-in tariffpayments for solar photovoltaic installations, prompted by fears over large-scale solar farms blowing the budget for Fits, was met with a chorus of disapproval from both the solar industry and environmentalists.

However, last week, John Costyn from the Department of Energy and Climate Change (Decc) explained the reason for exploring an upper limit of 50kWp for entering the scheme: it's because that is the legal definition of micro generation. This reminder that the tariff is all about encouraging small installations in and for local communities – not big installations needing big money and generating big profits – suggests that the review should be welcomed instead.

Mark Shorrock, from solar farm developers Low Carbon Solar and the landowner- and investor-backed campaign group Power to Society, has claimed that "scores of 'big society' community-owned schemes" are affected. In practice it's probably no more than a dozen schemes that are close to 100 kWp, and any limit must surely be adjusted to accommodate these. But let's be clear about how big a 50kWp installation is – up to 270 panels, a sizeable installation for any community building or social housing project. Every school in the country, for example, could spend up to £145,000 and gain an income, including free electricity, of £17,000 a year.

At the Solar Co-op, we have raised finance for our first big installation from another cooperative and there must be hundreds more co-ops, charities, churches, trusts and other organisations interested in finding a safe, ethical home for their members' money. The early review has unsettled a lot of people who are striving to make community-funded installations a reality, but with the clarity that projects below 50 kWp will not be affected, there is still more than enough to be getting on with.