New Energy Secretary Ed Davey must announce steps to safeguard the 29,000 solar jobs currently threatened by disastrous Government proposals to reform the solar subsidy scheme when he publishes the results of a public consultation into the plans on Thursday (9 February), says Friends of the Earth. 

The environmental campaigning charity warns that rapid action to sort out the solar chaos Ministers have created must be an urgent priority. As well as safeguarding jobs this would also boost business confidence over the Government’s commitment to a low-carbon future.

Mr Davey is also being urged to abandon plans to appeal to the Supreme Court against a court ruling that Government solar subsidy plans are illegal. Earlier this month the Court of Appeal confirmed that Government proposals to cut solar tariff payments for any scheme completed after 12 December 2011, 11 days before the official consultation ended, was unlawful. It followed a legal challenge by Friends of the Earth and two solar firms, Solarcentury and HomeSun.

A wider review of the Government's feed-in tariff scheme, which will propose subsidy payment levels for other small-scale clean energy systems - such as wind - along with other reforms, is also due to be published on Thursday.
 
Friend of the Earth's Executive Director Andy Atkins said:
 
“New Energy Secretary Ed Davey must ride to the rescue of thousands of UK solar jobs by insisting on significant changes to Government proposals to overhaul its solar subsidy scheme.

“The response to the public consultation on the disastrous solar subsidy proposals is a golden opportunity to sort out the mess the Coalition has created and re-establish the Government’s commitment to a clean energy future.

“Falling installation costs mean solar subsidies should be cut – but this should be done in a way that protects jobs and allows more cash-strapped households to plug into clean energy.

“Developing the UK’s huge renewable energy potential is essential to tackle the huge damage caused by our dependency on expensive fossil fuels – a clean energy future and a strong economy are two sides of the same coin.”

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Background

The Government is due to publish the results of its solar subsidy consultation on Thursday (9 February 2012).

Although there is widespread agreement that solar subsidy payments should fall to reflect the falling cost of solar panel installation, the package of measures proposed represents a major threat to the industry – and would lead to a major reduction in the number of people who would be able to plug into clean energy. Up to 29,000 jobs are under threat from the Government’s proposed reforms.

The proposals have met with widespread opposition from the solar industry and environmental groups, as well as others including the CBI, Federation of Small Businesses, NFU, housing associations, councils and MPs from all political parties.

One of the proposals, to cut solar tariff payments for any scheme completed after 12 December 2011, 11 days before the official consultation ended, was legally challenged by Friends of the Earth and two solar firms, Solarcentury and HomeSun. Shortly before Christmas 2011 the High Court ruled that the proposal was illegal – a decision upheld by the Court of Appeal last month. The Government says it now intends to appeal to the Supreme Court.

The legal ruling was important because it sets a crucial legal precedent. It means that, pending a successful Supreme Court appeal, Ministers won’t be able to abruptly change subsidy payments in future. It will also prevent the Government from cutting agreed payments for clean energy schemes that have already been installed.

However, a number of other proposed changes to the solar subsidy scheme are also a major threat to solar firms and thousands of jobs.

Friends of the Earth is urging new Energy Secretary, Ed Davey, to take a fresh look at the solar subsidy proposals and introduce amendments to safeguard the industry, save jobs and help more cash-strapped households to switch to cleaner power. 
 
The environmental campaigning charity is calling on Mr Davey to ensure the solar feed-in tariff scheme is reformed in a way that protects the industry and the tens of thousands of people it employs. Measures should include:

• Increasing the overall feed-in tariff budget using tax revenues generated by the solar industry to ensure there is enough cash available to at least maintain the industry at its current size – and enable more households to use cleaner energy.

• Scrapping a damaging proposal to give multi-building solar projects even lower financial support. At the very least, housing association, school, council and other community projects must be excluded from this.

• Requiring solar projects on homes to only install loft and cavity wall insulation where possible - rather than imposing much tougher energy efficiency conditions that would make 9 out of 10 householders ineligible for the scheme.

Making the above changes would not only protect solar jobs, it would also boost wider industry confidence in the Government's commitment to a low carbon economy. The Government's cack-handed approach to the solar subsidy reforms, along with Chancellor George Osborne's anti-green agenda, have caused great uncertainty in the business community.

Friends of the Earth is also urging the Government to help end this uncertainty facing the solar industry by abandoning plans to appeal to the Supreme Court. A letter to David Cameron calling for an end to the legal action has already been signed by more than 10,000 members of the public in the fortnight since the Government announced its intention to appeal.

FEED-IN TARIFF CONSULTATION PHASE 2
A wider review of the Government's feed-in tariff scheme, which will propose subsidy payment levels for other small-scale clean energy systems - such as wind - along with other reforms, is also due to be published on Thursday.

The phase two consultation is expected to give details on the anticipated size of the solar industry once the planned reforms have been implemented – giving a clear indication of the number of job losses in the industry if proposals aren’t amended.

The review is intended to establish a new ‘cost control framework’ which the Government says will bring down tariff rates in a stable and less disruptive manner as the costs of the technologies fall.  One option touted is a ‘volume trigger’, where the payment level falls automatically when a certain number of installations is reached. This is similar to how the system works in Germany. Such a mechanism would bring welcome stability – provided the ‘trigger’ is set high enough to maintain current job levels.

The phase two consultation may also contain details of a community energy tariff. Friends of the Earth, along with the National Housing Federation and a host of community energy groups, have called for this tariff to include social housing projects so those who don’t own their own property can also benefit from the scheme.
 
THE URGENT NEED TO BUILD A CLEAN ENERGY FUTURE
The overwhelming cause of our sky-high fuel bills is the soaring price of gas, and the Big Six energy firms that dominate the market and keep us all hooked on expensive fossil fuels.

Between 2000 and 2010, average gas bills rose by nearly 80 per cent in real terms, while electricity bills rose by around a third. And despite recent price cuts by the Big Six, analysts warn that higher energy prices are here to stay.

If we want to protect cash-strapped homes and businesses from future price hikes we must invest in cutting energy waste and clean sources of power. Switching to a low-carbon economy won’t be free – but it will be far cheaper than sticking to our current fossil fuel dependency.

Feed-in tariffs have an important part to pay in helping homes and businesses to be part of the switch to a cleaner, safer future. The new Energy Minister must show that the feed-in tariff scheme is safe in his hands.

Friends of the Earth's legal challenge to cuts in solar incentives is part of its Final Demand campaign, which calls for energy we can all afford and a public inquiry into the power and influence of the Big Six energy companies. Find out more at www.foe.co.uk/finaldemand.

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