Archived press release
Govt starts new process to cut solar subsidy payments
Government moves today (Thursday 19 January 2012) to cut solar subsidies by early March – reducing the uncertainty hanging over the solar industry since Ministers attempted to rush through payment cuts in December – have been welcomed by Friends of the Earth.
The solar industry was left reeling – and 30,000 jobs thrown into jeopardy – when the Government announced plans last year to abruptly cut payments for any solar scheme completed after 12 December 2011 - 11 days before an official consultation into the proposals had even closed.
Shortly before Christmas – following a legal challenge by Friends of the Earth and solar firms Solarcentury and HomeSun – the High Court ruled that the Government's plans were illegal, saying Ministers could only alter the payments after going through Parliamentary procedures – allowing industry time to plan for change. Last week the Government challenged the ruling in the Court of Appeal, and a decision is due within the next few weeks.
Friends of the Earth is also calling on Ministers to boost certainty for solar by using the multi-million pound tax revenues generated by solar firms – enabling more homes, businesses and communities to switch to clean British energy.
Friends of the Earth's Executive Director Andy Atkins said:
“At last the Government is taking steps to sort out some of the uncertainty that's crippling a thriving UK industry – planned cuts will at last allow solar firms to start planning for the future.
"Solar payments should be cut in line with falling costs – but by trying to rush through payment before the consultation closed Ministers created a shambolic mess that threatens 30,000 jobs and the future of the industry.
"Minsters must urgently use the millions of pounds in tax that solar firms generate to safeguard this industry and the jobs and businesses it has created.
"We must do more to protect cash-strapped families from soaring fuel bills - that's why we're campaigning for the Government to fix our broken energy system and enable more people to plug into clean British energy.”
Notes to editors:
1. 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.
2. Ministerial Statement on feed-in tariffs, Thursday 19 january 2011.
3. Friends of the Earth has been urging the Government to put regulations before Parliament as soon as possible to end the uncertainty about tariff payments. Government moves today will enable the industry to know that tariff payment will be cut by the end of February at the very latest. If Ministers win their appeal - the 12 December cut-off date will be reinstated.
4. The Government's proposals have already had a devastating impact. Countless planned clean energy schemes have been abandoned and thousands of jobs are under threat. In December construction firm Carillion warned 4,500 workers their jobs were at risk because of the Government's proposals. Examples of solar energy projects that have either been scrapped or are in jeopardy are available from Friends of the Earth’s press office – please call 020 7566 1649/ 07712 843 209 for more information.
5. In November last year research by Element Energy, commissioned by Friends of the Earth and the solar industry, showed that the premature cuts could threaten 29,000 jobs and lose the Treasury up to £230 million a year in tax income. It showed that additional costs to lift the cap off the scheme will be more than equalled by extra tax receipts to the exchequer and saving on unemployment benefit that would have been paid to sacked solar fitters.
6. Friends of the Earth is calling on the Government to:
- Establish a system which enables feed-in tariff payments to fall from mid February 2012, in line with the falling cost of solar technology, in a way that supports the continued growth of the industry and jobs;
- Increase the overall budget for feed-in tariffs using tax revenues generated by jobs created by the scheme – this will enable more households to benefit from solar power.
- Exclude housing association, school, council and other community projects from the damaging proposal to give multi-building projects even lower financial support.
- Only require solar projects on homes to install loft and cavity wall insulation where possible - rather than imposing much tougher energy efficiency conditions which would make 9 out of 10 householders ineligible for the scheme.
- Relax over-strict energy efficiency proposals which will prevent 90 per cent of housholds applying for solar tariff payments and new measures to boost clean energy for social housing schemes.