The solar industry is dragging the Department of Energy and Climate Change (DECC) back to the High Court, this time with revenge on its mind.
Seventeen solar companies have joined forces, putting an eye watering ￡140 million price tag on DECC’s “legally flawed” changes to the feed-in tariff (FiT).
The controversial claim has sparked fierce debate from within the industry and it’s no surprise.
The pain felt by the sector from the fallout of the FiT fiasco is still fresh. At the drop of a hat, industry went from flat out to a screeching halt; jobs were lost and businesses went under.
Memories loom large but with the period of uncertainty finally in the past, some think it’s time to focus on the future.
Right now there appear to be two distinct schools of though forming in the industry: DECC sceptics and DECC believers.
The DECC believers
It is widely acknowledged that DECC completely underestimated the capability of solar in the UK, much to its detriment.
However, the domination of the FiT scheme by solar, the speed of its deployment, the technology’s popularity with the British public and, most importantly, the 60% reduction in cost caught the department’s attention.
Since then, DECC has appeared to work hard to introduce the stable framework that industry has been crying out for.
The degression mechanism for the feed-in tariff allows industry to accurately predict the available level of subsidy well into the future. The new Renewable Obligation banding sets out the support solar can expect to receive right out to 2017 and even includes a bonus rate for roof-mounted solar. The updated Renewables Roadmap now explicitly lists solar as a key technology in helping the UK meet its renewable energy targets.
Finally, it seems that the rhetoric coming out of DECC is finally being matched by firm action. Watching Greg Barker deliver an impassioned speech at the launch of the National Solar Centre, you’d be forgiven for thinking that Barker was solar’s greatest advocate, not industry’s public enemy number one.
Undoubtedly, DECC’s chaotic mismanagement of the FiT scheme caused the solar industry to lurch from boom to bust. It could have, and should have, been handled better. But DECC’s hands were tied – a FiT rate of >40p/kWh is not taxpayer value and the success of solar was causing a runaway financial problem.
The changes to the FiT scheme were an unsavoury chapter for the industry. With the new policy in place and installs beginning to recover, perhaps it’s time industry buried the hatchet with DECC.
The DECC sceptics
Since the introduction of the feed-in tariff scheme DECC has taken every opportunity available to single out and persecute the solar sector.
First it was fast-track changes to the large-scale FiT rates, then swingeing (and indecently illegal) cuts to the domestic FiT rates. Industry rallied together to fight back against the cuts, winning victory in the High Court.
What did DECC do next?
Realising the implication of the High Court defeat, DECC intentionally appealed the decision and strung out the legal process for as long as it could. As a result, the market was left shrouded in uncertainty for months, with consumers completely unaware of what FiT rate they would receive. After the Supreme Court finally ended the legal wrangling, industry breathed a sigh of relief – but DECC wasn’t finished.
New, lower FiT rates were pushed through. Crucially, DECC linked the new rates to energy efficiency requirements – a restrictive move that no other FiT technology was subjected to.
Customer confidence hit rock bottom and installation rates plateaued to levels that cannot support the number of solar companies the FiT scheme initially fostered.
DECC has been touting the updated Renewables Roadmap as a major step forward for the industry, with an upper projected limit of 20GW by 2020. What’s the lower estimate? 7GW.
With all new solar policy heavily reliant on the industry repeating its Poundland-like cost cutting, 7GW by 2020 sounds about right.
Time and time again, industry has believed DECC’s hyperbole only to be disappointed by the actual outcome. It’s time solar got wise.