Press release

Miliband challenge to Government solar funding cuts welcomed

1 July 2011

Ed Miliband's challenge to the Government today over its plans to scrap solar power subsidies has been welcomed by Friends of the Earth, the National Farmers Union and the solar industry, who warn the move could kill off the UK's fledgling green power revolution.

The Labour leader has tabled a motion that will trigger a Parliamentary debate on proposed 70 per cent cuts to the Government's feed-in tariff (FIT) payments for energy generated through solar panels over 50kW - equivalent to panels for around 15 homes.

More than 60 organisations, including Friends of the Earth, Solar Trade Association, Co-operative Group and the National Farmers Union (NFU), are warning that such drastic cuts are likely to have a devastating impact on community green electricity projects and small businesses, threatening jobs and undermining the UK's shift to a low carbon economy.

Meanwhile EU countries like Germany plan a massive increase in solar to meet rising electricity demand.

Labour's Energy spokesperson Baroness Smith will also challenge the cuts in the House of Lords. 

Friends of the Earth's green energy campaigner Donna Hume said:

"The feed-in tariff scheme has been a big success in encouraging people to install solar electricity systems - drastic cuts are bad news for businesses and communities who will miss out on cheaper bills.

"Our schools, businesses and housing estates could become mini-power stations as they are in Germany, where proper solar industry funding has led to falling fuel bills for families.

"The Coalition says green growth is crucial to our economy - instead of short-term cost-cutting it should support a home-grown solar power revolution and create new jobs and businesses."

Solar Trade Association Chairman Howard Johns said:

"We are delighted the Merits Committee has drawn attention to the proposed changes to the FIT regime - the Coalition Government would be making a terrible mistake to sacrifice the UK solar industry and this needs proper Parliamentary debate.

"The debate should focus on the true potential of solar to the UK based on current costs, jobs and manufacturing opportunities. The FIT has been a huge success to date, but communities and businesses have been left reeling at the scale of the proposed cuts.

"With major EU economies now making solar a central plank of their 2020 energy plans, the UK needs to take this technology seriously and support solar at all scales. We will not get another chance to take a major share in this booming global industry."

NFU's Chief Adviser, Renewable Energy and Climate Change, Dr Jonathon Scurlock said:

"The interests of farmer and growers would be best served by a balanced range of incentives across all scales of project - there are many entrepreneurial farmers who have been left stranded by the proposed cuts.

"The NFU would very much welcome the opportunity to air these issues in Parliament."

Mark Shorrock, CEO of Low Carbon Solar, a leading community solar projects developer, said:

"The Government has clearly not listened to the industry's response to its consultation. Having full debates in both Houses is a positive step for the issue to be discussed openly.

"We support the Government's objective for creating a sustainable basis for renewable energy in the UK for the long term. However, by the Government's own admission, its proposal is likely to prevent any solar projects above 50kW being developed across the UK.

"This is not the appropriate way to lead the transition to a low carbon economy."

ENDS

Notes to editors

1. Supporting the motion tabled by Ed Miliband, Shadow Energy Minister Huw Irranca-Davies said: "Minister Greg Barker's decision to go ahead with the proposed dramatic feed-in tariff reductions for community, school and hospital schemes is a big blow to British industry and betrays the Coalition's promise to be 'the greenest government ever'. This decision not only risks thousands of jobs in an industry that was beginning to flourish, but shows there is no coherent plan for helping communities to produce green energy. A decision such as this which fundamentally alters the future for the solar industry in the UK deserves real debate, where MPs can question the Minister on his rash and ill-thought out decision. It should not be snuck quietly through the Commons." 
2. Research by the Renewable Energy Association estimated the FIT scheme would have created 17,000 new jobs by the end of 2011, until the proposed cuts shook investor confidence. 
3. Ernst and Young's recent UK Solar Outlook report said solar had an important role in contributing to renewable energy targets and increasing electricity sector competition. E&Y said that if solar was supported now, it could be subsidy free by 2017.
4. Since the Government announced its intention to review the funding of solar electricity projects earlier this year numerous planned solar energy projects - including community schemes - have been put on hold by investors fearful of the outcome of the review. The Government committed to supporting community projects in the Coalition Agreement last year. Solar manufacturing and installation firms have seen a reduction in demand, which has hit plans to create thousands of new UK jobs in the sector.
5. Feed-in tariffs were introduced in April 2010. The funding scheme provides guaranteed long-term payments for small scale green electricity generation for a range of renewable electricity technologies up to 5MW in size (equivalent to around two wind turbines). But Ministers say the scheme has encouraged too many commercial solar farms - and launched a consultation earlier this year on plans to cut payments to solar electricity projects over 50kW in size. A Friends of the Earth briefing is available.

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Published by Friends of the Earth Trust