Feed-in-Tariffs cuts

Published on Friday, 11 November 2011 15:43
Written by Tom Greatrex MP

What a difference a year makes. It is often said that a week is a long time in politics. In the case of the current Tory-led government, a year can seem like an eternity

On 23 November 2010, Greg Barker was extolling the virtues of Feed-in-Tariffs and his government’s commitment to the solar industry. In a speech to the Micro Power Council, the Energy and Climate Chance Minister claimed that “sustained long term growth is our aim and I shall be listening carefully to the industry.”

Fast forward to Monday 31 October 2011, and how hollow those words now appear. On that day, after much trailing in the press in the preceding days, Greg Barker announced a 52% cut to Feed-in-Tariffs move that would almost destroy the entire solar industry.As the installation costs for solar have reduced by about 30%, most accept that there should be a reduction in the tarrif to reflect that change.  Yet the seemingly arbitrary new figure of 21p/kWh, a cut of 52%, with just six weeks notice, appears to bear no relation to the reduced cost of installations.

The government’s cuts threaten to kill off the domestic solar industry - the same solar industry which now employs 25,000 people across the UK, compared to just 3000 a year ago.Many companies fear for their survival as a result of the government’s cuts to Feed-in Tariffs. One company just outside my constituency, which is one of the largest private domestic installers of solar PV in the UK, recently took on 16 graduate engineers. The chances of the company being able to hold on to these young engineers is remote. In all likelihood, they will have to be laid off just before Christmas. There are similar examples from every part of the UK, many of them small companies.

The proposals will also consign many community projects to the scrapheap – the opportunity for schools, for public sector housing and other innovative, local schemes has been lost despite, in some cases, months of preparatory work.The cuts to the Feed-in-Tariff will not just impact the solar industry. They will mean that nearly 9 out of 10 families will be excluded from solar. Ordinary people who try to green their homes and protect themselves from hikes to their energy bills will be amongst the biggest losers.

At a time of soaring unemployment and a flat lining economy, it seems bizarre for the government to be destroying one of the few industries which are thriving despite the challenging economic backdrop.The substance of the announcement by the government was bad enough. But the shambolic way the Government has mishandled this will have serious repercussions on the willingness of companies to invest in the green economy in the future. Despite pledging to listen to the industry, he chose to announce a consultation which ends on 23 December – even though the changes come into effect on 11 December. It is little wonder that people fear the consultation is a sham, or why the changes could be subject to a judicial review.

Who would trust this government not to impose further changes to this or other schemes down the line with little or no consultation with businesses and investors? What business will invest in the low carbon economy when it can’t be sure that the government won’t pull the rug from under it at any given moment? When thousands of jobs across the UK are at stake as a result of the government’s action, one would have thought the man responsible for that decision would have had the decency to be held accountable for it. The Secretary of State for Energy and Climate Change, Chris Huhne  tried to sneak out the detail in a written statement.

After Labour’s Shadow Energy and Climate Change Secretary Caroline Flint forced an urgent debate on the government’s cuts in the House of Commons, Chris Huhne sent his Tory junior minister, Greg Barker, along to defend the government. The many thousands in the solar industry whose futures are now in doubt because of Chris Huhne’s actions deserved better than this.David Cameron’s claims to lead the greenest government ever lie in tatters following the cuts to the Feed-in-Tariff. The draconian reduction is yet another example of an out of touch government which is not only cutting too far and too fast but also jeopardising the future of a fledgling industry.

Tom Greatrex is MP for Rutherglen and Hamilton West, and Labour’s Shadow Energy Minister

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