Isra-Mart srl: Report: Small subsidy increase could save solar industry

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Isra-Mart srl news:
Adding as little as £6.50 to annual power bills could ensure electricity from solar panels in the UK drops to the grid average cost within a few years, one of the country's leading solar installation companies has claimed.

Research by Engensa finds that a modest increase on the £2 currently tacked on to bills could build a viable industry and protect the 25,000 jobs the sector currently supports.

Toby Ferenczi, the company's chief technology officer, told BusinessGreen that "£6.50-£8 per household per year would get us to grid parity", allowing the industry to grow at a sustainable rate until the point at which solar energy costs the same as conventional energy.

The estimate contrasts sharply with the £120 per household the Department of Energy and Climate Change (DECC) estimates is spent on nuclear decommissioning by the government.

"What we're asking for is nowhere near £120 - it's significantly less than £10 per household per year," Ferenczi added. "With that we can create a solar industry that doesn't require subsidy."

The government will cut support to solar photovoltaic (PV) panels by half for installations completed after Monday, arguing that without swift and deep cuts to incentives the feed-in tariff subsidy would add £55 a year to bills by 2020, a figure climate minister Greg Barker has since raised to £80.

These figures have been hotly disputed by the industry, who have argued the government's estimates are based on the government taking no action to reduce feed-in tariffs, when the industry is in fact calling for deep cuts to be imposed, but only after April.

Ferenczi called DECC's £80 estimate a "nonsense figure" taken from a hypothetical and extreme scenario, adding that it was indicative of how little those at the heart of government knew about the actual cost of renewable energy subsidies.

A survey to be published by Engensa later today finds that while 77 per cent of the 858 respondents supported the idea of producing energy from renewable sources rather than fossil fuels in the next five to 10 years, just six per cent knew feed-in tariff subsidies added just £2 to bills.

"The attitude towards renewable energy amongst the general public is much more positive than it has been portrayed in the media," Ferenczi said. "There's a lot of politicking going around.

"The green agenda is seen as something that comes from the left and as a hindrance to businesses. Actually, there's a huge amount of opportunity in green energy - the carbon plan [published last week] showed a "do nothing" strategy is actually more expensive than green agenda."

Some solar companies are bracing themselves for layoffs as a result of the cuts, and Ferenczi admits the climate is now much more hostile, both for sales of solar systems and financing models where the company installs the kit for free and keeps the feed-in tariff payments.

"The cuts have caused huge disruption to the way we operate on the investment side," he said. "We expect to see significantly reduced demand in paid-for installations, although this may pick up slowly in the New Year.

"We expect to be able to offer free solar post December 12th, but it will be extremely challenging."

The government has consistently maintained its proposed cuts are necessary to stop the feed-in tariff exceeding its spending cap before next April.