Archived press release

Shadow over Government funding for solar energy

2 September 2004

Key schemes to end next year

The UK's fledgling solar energy sector could be killed off because the Government is back-tracking on its funding plans, Friends of the Earth warned today.

Two key government funding programmes aimed at boosting solar energy in the UK are to be wound down earlier than planned, with little clarity as to what will follow. Friends of the Earth is calling for a clear strategy for solar energy development - one of the government's largest renewable programmes. Later this month Tony Blair is due to give a major speech where he is expected to describe climate change as the world's biggest collective challenge. Solar power has an important role to play in tackling it [1].

The solar PV Major Demonstration Programme (MDP) [2] and the Clear Skies Programme [3] are due to be wound down early. Phase 1 of MDP, from 2002-5, which is worth 20 million, was forecast to deliver 9MW by 2005, or the approximate equivalent of 3,000 domestic roofs. This could have risen to 200MW by 2012 if the full programme was implemented [4]. So far 6MW has been installed.

The UK lags behind many countries in Europe and rest of the world when it comes to using solar power technologies - despite UK Government promises to champion renewable energy. California is proposing to add solar power to a million homes in the next 10 years [5], whilst 150MW of solar PV was installed in Germany last year, and 200MW is expected to be installed in 2004. On 12 separate occasions since 1999, the German programme has delivered the equivalent of the UK's three year target in one month.

Friends of the Earth's Climate Campaigner Catherine Pearce said

"Whilst Tony Blair stands on the world stage, championing the fight against climate change, the UK's domestic solar power industry is under threat because of a lack of Government funding. Germany has installed almost as much PV in one year as we are attempting to achieve in ten - and we are struggling to achieve this. The Prime Minister must put his money where his mouth is, and help the UK take a lead in developing a range of renewable technologies that will help combat global warming."

Although a new scheme to replace the current programmes has been proposed, there are considerable doubts over how much will be given to solar power. The new "technology blind" building integrated capital grant programme, proposed in the Government's Renewables Innovation Review, has no clear budget, no clear start date and no clear departmental sponsor. The start date of this new programme is allegedly next March/April but with no consultation yet announced, industry believes this would not be possible until next autumn at the earliest. This leaves the industry with a minimum 6-month funding gap.

A one year extension to the existing programmes would ensure both continuity of support to these rapidly growing technologies and give Government the necessary breathing space to plan properly, develop and then implement its proposed new scheme, which is due to commence in winter/spring 2005/6.

For the industries affected the current scenario is disastrous. Companies face a black hole in support and a huge degree of uncertainty, at a time when the Government's programmes to date have been at least partially successful in leveraging rapid innovation, growth and development in the solar PV and other renewable energy markets. This uncertainty is already making future investment, job recruitment and new product development planning impossible and is sending all the wrong signals to the market.

Since the Government has repeatedly emphasised that its preferred policy driver for the "near commercial" renewable technologies is capital grant funding, a short-term practical solution to the current predicament is desperately needed. MPs have also expressed concern about the future of the funding programme. Before the Parliamentary recess, 120 MPs signed an Early Day Motion urging continuity of support for the PV industry.

Notes

(1) The Government has set targets for the percentages of the UK's electricity supply it would like to see provided by renewable energy sources:

• 5% by 2005
• 10% by 2010
• 20% by 2020 (`aspirational' target)

Renewable energy sources in the UK currently provide 3.86% of the total electricity supply.

(2) On 13 February 2001 the Government announced its intention in the "Opportunity for All" White Paper to "embark on a major initiative with industry and others to achieve a UK solar photovoltaic demonstration programme in line with those of our main competitors." This was backed up on 26 March 2001 with the publication of the Government-Industry PV Group Report, which included in its recommendations a proposal for a 150 million 10-year programme for 70,000 roofs and 1,400 larger non-residential buildings. This is equivalent to a 200MW target. 6MW has so far been installed.

(3) The Performance and Innovation Unit recommended that up to 10mill of support be provided as capital grants 'for community and household schemes'. The 'Clear Skies' represents this allocation and was known as the Community and Household Capital Grant Scheme for Renewable Energy whilst it was designed. Clear Skies, launched in 2003, funded by DTI and managed by BRE, aims to give householders and communities a chance to realise the benefits of renewable energy by providing grants and access to sources of advice. Householders can obtain grants between 500 to 5000 whilst not-for-profit community organisations can receive up to 100,000 for grants and up to 10,000 for feasibility studies.

Grants are given to the following renewable energy installations: Solar thermal, Wind turbines, Micro/small scale hydro turbines, Ground source heat pumps, Room heaters/stoves with automated wood pellet feed, Wood fuelled boiler systems.

(4) Phase 2 of the 200MW to 2012 is predicted to generate up to 1,800 jobs per annum.

(5)California is proposing to add solar power to a million homes in the next 10 years, paid for by a surcharge on consumers' electricity bills equivalent to about 15 pence a month. The plan, proposed by the California Environmental Protection Agency, is intended to honour the election pledge of California's governor, Arnold Schwarzenegger, to ensure that half of all new homes in the state are built with solar power facilities.

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Published by Friends of the Earth Trust