- Posted by Gus Mank
- On September 13, 2015
- 0 Comments
September 7th, 2015 by Joshua S Hill
Amber Rudd, the UK’s Energy and Climate Change Secretary, has defended her government’s decision to cut solar’s access to the country’s popular feed-in tariff scheme.
Announced last week, the UK Government revealed the result of its consultation into various renewable energy incentives — including the wildly successful feed-in tariff (FiT) scheme. According to the results of the consultation, the UK Government is looking at possible cuts of up to 87% on domestic solar, and 72% on commercial rooftop solar. Specifically, the cuts to the FiT will affect solar PV, wind, and hydropower projects, and will attempt to cap the government’s spending on the FiT scheme to £75 million to £100 million from 2016 to 2018/19.
Writing today on BusinessGreen, Amber Rudd, the Energy and Climate Change Secretary, defended the decision, citing the “spectacular” fall in solar costs and the “successful” response to the FiT scheme.
“Part of this overspend is because industry has been so successful at responding to the incentives government put in place,” Ms. Rudd wrote. “Our initial ambition was to support 750,000 installations under the FiT by 2020. Take-up has been so great that we expect to achieve this ambition by the end of this year. But this has meant the overall cost of the scheme has also exceeded expectations.”
Furthermore, “the technologies being supported” by the FiT scheme “have seen dramatic reductions in cost” — “In solar, this fall has been spectacular.”
Amber Rudd has repeatedly couched her response to cutting renewable energy incentives and support mechanisms in terms of keeping “bills as low as possible for hardworking families and businesses across the country.” Ms. Rudd made the same comments back in July when the Department of Energy announced the consultation on possibly ending the Renewables Obligation support for solar farms: “My priorities are clear. We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.”
A Short-Sighted Policy
However, Ms. Rudd’s desire to keep “bills as low as possible” seems to be somewhat short-sighted. Assuredly, cutting back on financial incentives for the renewable energy will have an immediate impact on taxpayers who will no longer need to support the growth of the renewable energy industry. Nevertheless, failing to grow a country’s renewable energy industry will only yield ever-increasing electricity bills as the need to pay for the dying fossil fuel industry will only continue to grow.
These attempts to defend cutting renewable energy subsidies are all the more damning once you take into account a survey done by the International Monetary Fund, which was published in August, showing that the UK government is providing billions of pounds in subsidies to the fossil fuel industry, while at the same time decrying the need to cut renewable energy subsidies to keep taxpayers bills lower.
“The IMF is right to turn the spotlight on the billions of pounds in subsidies which the UK’s fossil fuel sector continues to enjoy at the expense of all of us,” said RenewableUK’s Deputy Chief Executive Maf Smith, in August. “Although there’s been a great deal of scrutiny about the cost of renewable energy, the price that all British taxpayers are still being forced to pay to the oil, coal and gas industries, decades after they became well-established, is eye-watering.
“It’s time for the UK to wake up to the benefits of renewable energy, Moving away from subsidising coal, oil and gas and backing technologies like onshore and offshore wind will help keep bills down and protect consumers.
“But a first step is Government being honest about the true cost of all forms of energy and the value renewables bring.”
Stop Punishing Success
“Once again the Energy Secretary is trying to justify Government’s actions by claiming the budget is blown,” said RenewableUK’s Director of Policy Dr Gordon Edge. “We’d question the basis of her assertion – we’ve repeatedly asked to see DECC’s workings for these figures because we don’t agree with them, but so far without result.
However, even if the DECC’s figures are accurate, punishing success seems an unhealthy way to promote business and innovation.
“Even if we were to agree with DECC’s calculations, any ‘overspend’ is either due to factors that are a net benefit to consumers, such as lower wholesale prices, or can be traced to DECC’s own management of the budget,” continued Dr. Edge. “As the Energy Secretary acknowledges, we’ve made great progress in the deployment of renewables – we shouldn’t be punished for being a successful industry or for the mistakes that Government itself has made.