Why is the government trying to destroy a nascent solar industry?


11:45 am - January 5th 2012

by Guest    


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It’s hard to imagine building companies and Friends of the Earth getting together to sue the Government, but in December this is exactly what happened.

Last February, I installed a small 1.2 Kilowatt Peak (KwP) system of solar (PV) panels on my roof. Since then, I have received 2 Feed-In Tariff (FIT) cheques, and am now awaiting the 3rd.

Even better, my monthly electricity payment is now a paltry £20 – yes, £20. With the FIT income alone the system will pay for itself in 10 years, but taking account of the reduction in my electricity bills it’s more like 5 years.

But ministers Chris Huhne & Greg Barker suddenly announced on 31st October that any new PV systems fitted after 12th December would only attract FIT payments of 21p from 1st April.

A so-called consultation on this change was simultaneously announced, but as it finished 2 weeks after the 12th December, most people regarded it as a charade. A judge then found that the Government had acted unlawfully.

PV panel prices have come down, as a small industry was stimulated and started to grow from 1st April 2010 onwards. This was exactly what the previous Secretary of State for Energy & Climate Change, Ed Miliband, had hoped for when he introduced the FIT system.

Green growth, providing real jobs during a time of economic difficulty, that also tackles fuel poverty and increases the percentage of renewable energy in our energy mix, would seem like something the new Government would support.

But Huhne and Barker sped ahead and squashed an entire blossoming green industry by pulling the plug early. Individuals and companies that had signed contracts, based on a level of FIT payment that now will not pay back the initial investment for years and years – can’t turn back.

Redundancy notices have been served on numerous electricians and scaffolders as orders have been cancelled. People who can personally raise cash (mostly owner- occupiers) have benefitted, while tenants, usually on more limited incomes, have not.

Huhne and Barker are now planning to appeal the judgement. Why don’t they just accept they have created a complete car crash by reducing FIT so suddenly?

Why not reduce it from 1st April 2012, as originally planned, instead of reducing it to a point suddenly where a new industry is destroyed, & thousands of jobs lost?

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The Feed-in-tariff fees aren’t actually tied to useful electricity produced for the grid for areas and times of actual cosnsumer demand (traditional sources provide for that). So, in fact, this isn’t saving the planet or significantly reducing our reliance on fossil fuels.

It is a subsidy for your energy bill, paid for by other energy users, some of whom will enter “fuel poverty” as a result of the higher prices. So it is a good thing it is being reined in. But congrats on getting in their quickly enough to benefit personally!

You are complaining about the withdrawal of a Government subsidy that should never have been given.

When the price of electricity and the cost of solar panels reached the point where panels could be employed to your, and everyone else’s, financial benefit that is the moment when they should have been deployed. The ridiculous government subsidy was motivated by extraneous, non economic factors and unproven rationales.

Please also note that the government has no money of its own to give you. It is OTHER PEOPLE’S MONEY that you are taking to subsidise your electricity bill!!!!!

Although you have done nothing illegal, it is more than arguable that you are, morally, a thief.

Why should the taxpayer subsidise those who can afford to have panels installed? Again it is the better-off who will benefit at the expense of the poor. Money would be better spent on energy efficiency schemes.

It is simple ; When fuel prices, Gas & Electricity is expensive the Government gets more VAT.

If people are not using fuel such as Gas and Electricity that means the Government gets less or next to no VAT.

This Government wants you to pay higher prices and use more so that they get more VAT (money).

This Government does not care about the environment and your pocket.

This Government wants your money, every last drop that it can bleed out of you.

It is that simple !

The answer is very simple really : The Government gets VAT on fuel such as Gas and Electricity.

If Gas and Elecreicity goes up in price the Government then gets more VAT because when prices go up so does the VAT.

If people stop using electric or cut down on it because of this technology the Government gets less VAT or next to none if the entire nation starts using solar energy or whatever.

This Government does not care about the environment or your pocket, it is only interested in getting more money into it’s purse through the system of VAT.

The Government has recently realized energy saving technology will mean less money into the Governments purse because it will get less VAT from electricity.

Imagine how much VAT the Government will lose if we all switch to solar energy. The numbers are enormous.

Now that the Government has woken up to this fact it has done a u-turn. It basically wants your money in the form of VAT.

Does anyone else have a different explanation ?

“PV panel prices have come down, as a small industry was stimulated and started to grow from 1st April 2010 onwards.”

No, the fall in panel prices had absolutely nothing at all to do with the UK’s FIT programme.

All due entirely to

a) production of silicon for PV finally coming online (previously it used the off cuts and rejects from computer chip manufacturing)

b) Fierce competition between the manufacturers.

Think about it for a moment. A subsidy to a product increases, not decreases, the amount that the manufacturer can charge for it. Straight supply and demand that is.

8. Leon Wolfeson

Because FIT’s are uneconomic subsidies, which this country can’t afford to burden the poor with.

@6 – The minister did it in the study with the crowbar.

Is an industry which is purely dependent on government spending really an industry we should be supporting?

Especially since the existence of that industry will stop the growth of cost-efficient (as in worthwhile without government subsidy) solar industry in this country, which seems rather stupid. If you genuinely want efficient solar power, it has to be able to compete (of course, it is perfectly valid to want to support an inefficent industry, but it is not honest to present not doing this as destroying an industry rather than encouraging more efficency).

10. Stolen Fruit Tastes Better

George Monbiot wrote a pretty good piece about this scam nearly two years ago.

“Why is the government trying to destroy a nascent solar industry?”

Because it is broke, and will be for decades to come.

I read another blog a while ago suggesting that this represents a victory for those in Whitehall who prefer larger, centralised energy generation rather than a more mixed approach including microgeneration. This suggests big business has lobbied effectively.

Nobody examining the FIT budget and how it was being taken up believed it would last as long as Miliband intended. It has effectively only benefitted those with plenty of cash. I know of one case where it was used to generate income no longer available through conventional savings schemes. This was surely not what was intended and must make similar schemes nearly impossible in the future.

For those who argue that green schemes should stand on their own in the marketplace I suggest spending a few moments considering how well coal would do as a startup if we had an established non-polluting alternative.

Apologists for the government gloss over how badly this was handled. It seems to me that Huhne has again shown how inadequate he is.

13. Leon Wolfeson

@12 – Because it makes SENSE to generate energy efficiently (centrally) rather than forcing the poor to subsidise rich people’s solar panels, perhaps?

Sure, there are subsidies for all kinds of power, but FIT’s are an order of magnitude above other subsidies and can only push bills up while generating very little power.

14. Charlieman

Some well meaning supporters of FIT argue that it pump-primes alternative energy sources. This is contradicted by looking at the circumstances where alternative energy already makes economic sense.

For people living in remote locations, scientific projects on rocks in the middle of nowhere etc, alternative energy may be the primary source. It is cheaper in some circumstances to use wind or sun than to transport oil. Then there are people living where there is a lot of sun or wind for a lot of the day. Even where we are in northern Europe, solar power for summer air conditioning or for water heating for much of the year can pay off the capital cost.

There is therefore an economic stimulus for alternative energy providers to service those markets. Subsidies are not required because those consumers already know that alternative energy will pay its way. Ironically, they are the only potential beneficiaries of FIT because they get the economies of scale from UK-based installers; however they start to lose those benefits as soon as they buy electricity at artificially high prices from mainstream sources, directly or indirectly (high energy UK-produced services and goods).

Mass consumers of conventional energy do not have pump-primed manufacturers of boilers, engines, turbines etc. Manufacturers have a simple incentive to produce cheaper, more efficient products: they’ll sell more of them. Why is it that manufacturers of alternative energy products require different incentives?

15. Leon Wolfeson

@14 – Solar Water heating is an entirely different issue to solar POWER. It’s much cheaper and makes economical sense in a lot of situations power panels do not.

Why not reduce it from 1st April 2012, as originally planned, instead of reducing it to a point suddenly where a new industry is destroyed, & thousands of jobs lost?

Because they are a bunch of useless fucks.

“Why not reduce it from 1st April 2012, as originally planned, instead of reducing it to a point suddenly where a new industry is destroyed, & thousands of jobs lost?”

As a rule, when you find some thieving sod with his hand in the cookie jar you stop them then and there. You don’t wait for them to take a dozen more before telling them to sod off.

Congratulations on getting in on the scheme in time to take money from the poor to line your own pocket.

18. jane mckellar

vexed about funding for the cardon capture project being withdrawn by an energy company too

19. Tax Obesity, Not Enterprise

It is worth remembering that this crazy scheme was the brainchild of one Ed Milliband. What judgment the man has!


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  2. Mark Forskitt

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  3. Hywel

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  4. Clint David Samuel

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  5. Wendy Davis

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  6. Doug James

    Excellent comments on Solar Power industry by Cllr Leonie Cooper http://t.co/Rb4bU4bH

  7. Janet Graham

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  8. Patron Press - #P2

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  10. leftlinks

    Liberal Conspiracy – Why is the government trying to destroy a nascent solar industry? http://t.co/O2683viz

  11. John D Clare

    Liberal Conspiracy – Why is the government trying to destroy a nascent solar industry? http://t.co/O2683viz

  12. Anarchist74

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  13. Ian 'Cat' Vincent

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  14. MCMLXXVI_ad

    Why is the government trying to destroy a nascent solar industry? http://t.co/qTq3Pz1u #solar #energy #climate #change #global #renewable

  15. Nick Cotter

    Why is the government trying to destroy a nascent solar industry? http://t.co/QuxQ5uJs

  16. Dean Reeves

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  17. Owen Blacker

    Why is the government trying to destroy a nascent solar industry? http://t.co/UabQeONP

  18. LeonieC

    See my piece on @libcon: Why is the government trying to destroy a nascent solar industry? http://t.co/0cm1iARS

  19. SERA

    http://t.co/AVlwSddt http://t.co/buUeDLz9

  20. Kieran Roberts

    Fellow @serauk exec member @LeonieC writing for @libcon. Well worth a read: http://t.co/RnROFpYI

  21. LeonieC

    Excellent comments on Solar Power industry by Cllr Leonie Cooper http://t.co/Rb4bU4bH

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    Why is the government trying to destroy a nascent solar industry … http://t.co/jHcTgiYm

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    Why is the government trying to destroy a nascent solar industry … http://t.co/jHcTgiYm





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