The Prime Minister David Cameron last week hosted the Clean Energy Ministerial amidst accusations of hypocrisy by environmental campaigners and the solar panel industry. This is because the conference, which promotes the development of renewable energy, came just weeks after the government cut the subsidy for solar power.
What No 10 had hoped would be a conference that presented the UK as a global leader in green energy was instead an embarrassment for the government; as it came to light that the cut has created a 90% drop in the demand for solar panels. Campaigners fear this will kill of the sector, with 5,000 jobs predicted to be lost as a consequence.
The reason for the sharp drop in demand is that the cut is to the tariff homeowners receive for feeding their solar panels excess energy into the national grid. By halving the amount received per unit of electricity supplied the government have effectively doubled the time it will take for the solar panels to become an economically viable alternative.
While all sides agree that subsidies had to be reduced, as the costs of solar panels continue to drop, the argument was about the speed and scale of the cut, with a 50% reduction in the subsidy viewed as going too far and too fast. The government however has defended the measure saying that the scheme they inherited had become too expensive and that it was energy consumers who would have ultimately suffered.
The chief executive of the Solar Trade Association Paul Barwell said “We’ve seen drops in installation with every policy adjustment, but we expect this one will take a bit more time to pick up.”
“Many householders are aware that government has slashed subsidies, the challenge for us is to make householders aware that’s partly because industry has slashed costs, and partly because solar is so popular. There is no doubt that financially solar remains a great prospect for UK homeowners so there is no good reason why the UK market should stagnate.”
