Explosive leaked report reveals uncertainty over future of UK's solar strategy
There is a perfectly legitimate argument against the UK diverting resources to support the development of a domestic solar industry.
Solar energy is currently very expensive and the UK's climate means it will never be as effective or reliable here as it is in warmer climes. There is a case for saying that a relatively small country with finite skills and resources should focus its efforts to decarbonise on a small number of more mature technologies, such as wind, nuclear, biomass, and cleaner fossil fuels, targeting incentives and support at these areas and leaving alternative technologies to cope as best they can on their own.
Personally, I don't buy this argument on the grounds that solar is seeing some of the fastest rates of cost reduction of any energy technology, green or otherwise, and improvements in manufacturing and nanotechnology hold out the potential for solar becoming cheaper than current forms of energy, even in northerly countries with a climate like that of the UK. I'd argue there is a strong case for subsidising solar at a reasonable level over the next few years in order to establish the domestic industry and skills base that will then allow for the mass roll out of the technology when it does become fully competitive.
However, we strive to be as technology agnostic as possible at BusinessGreen and it is important to acknowledge that there are concerns about the viability of solar in the UK amongst both high profile environmentalists and respected energy industry experts. It is possible to construct a plan that would allow for the UK economy to be decarbonised with minimal reliance on solar technologies. There are plenty of influential voices out there who would argue that we'd be better served in the long run to marginalise solar and focus our low carbon energy strategy on a mix of nuclear, wind, and carbon capture and storage.
The problem – as revealed by the explosive analysis of a meeting between DECC officials and the solar industry that is currently doing the rounds of the solar sector and was today leaked to BusinessGreen – is that this debate on the future of solar is being had behind closed doors at the highest echelons of Whitehall at the same time as the renewables industry is being publicly told solar remains an important part of the UK's energy plans.
To hear that senior officials within DECC are openly questioning solar's suitability for the UK and regard many of the jobs created by the industry as temporary and unsustainable only confirms what many solar firms have long suspected. But worst still, it further fuels levels of investor uncertainty that are already at unsustainable levels.
The proposal of deep and rapid cuts to solar feed-in tariffs and the government's point blank refusal to look at whether additional funds could be found to protect against the worst impacts of the reforms (remember, this week alone £200m has just been found to support the Green Deal and £1bn has been identified to drive youth employment initiatives) increasingly looks like a fudged compromise between those in DECC who want the UK to have a solar industry and those who are unconvinced we want or need one.
This internal battle leaves the solar industry (and indeed the wider energy industry) in an appallingly unstable position. Leaving aside the difficulty of coping with the pace and scale of the cuts to feed-in tariffs that are now expected, solar firms need to decide whether they believe the ministers who claim they want to put the sector back on a "sustainable growth path", or the officials who have clearly left some within the industry with the impression solar may not have much of a future in the UK. Imagine trying to convince investors and customers to back the sector when you are faced with that little dilemma.
The government is now taking so much flak over its handling of the cuts to feed-in tariffs (witness Chris Huhne's shellacking on Question Time last night) that it urgently needs to rethink its strategy.
It is time for some tough decisions to be taken. Ministers need to make it clear once and for all whether they believe solar will represent an important part of the UK's energy mix going forward or not.
There is plenty of evidence to suggest such a stance would represent a grievous error of judgement, but if they do not think solar is suitable for the UK, then they need to bite the bullet and let everyone know their position. That way green investors and entrepreneurs can start making decisions from an informed position and divert their energy and finance into those low carbon sectors the government does believe in.
If they believe, as they claim, that the reforms proposed for the feed-in tariff scheme are a painful short-term solution to a short-term problem and the UK has the potential to build a vibrant and successful solar industry, then they need to tell their officials to shut up about any doubts they may have and focus their efforts on developing a policy framework that can deliver sustainable and stable growth for the sector. If that requires additional funding and a compromise on the appallingly mishandled proposed cuts to incentives (which it does), then that is what ministers and officials have to deliver.
The government needs to decide which side it is on in the solar debate. And, for the good of the whole low carbon economy, it has to make that decision fast.
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