Britain��s solar capacity shot up10-fold last year, defying Energy Secretary Chris Huhne��s effort to roll back subsidies for the industry and prevent the sort of booms experienced in Germany and Italy.
Solar panels with at least 761.9 megawatts in capacity wereinstalled in 2011 compared with 76.8 megawatts the prior year,according to figures on the website of U.K.��s energy regulatorOfgem. About two-thirds of the capacity and 95 percent of theprojects were installed on homes.
Huhne twice last year moved to rein in support granted inApril 2010 in the form of feed-in tariffs, which guaranteepremium rates for electricity from solar power. Companiesincluding EON AG (EOAN), Tesco Plc (TSCO) and Carillion Plc (CLLN)��s Eaga rushed totap the market, supported by fund managers such as ForesightGroup LLP and Octopus Investments Ltd.
��It��s been a very busy and successful year for the solarindustry,�� Howard Johns, chairman of the Solar TradeAssociation and managing director of installer Southern SolarLtd., said by e-mail today. ��But now most of the industry is ata standstill with the uncertainty caused by the government.��
The price of panels today is less than half of where it waswhen the subsidy program began, making more installationseconomical and sustaining 25,000 jobs.
Subsidy Restraint
Huhne��s ministry responded in March 2011 with an emergencyreview of its support measures that cut rates as much as 71percent for commercial-scale plants. Developers then turnedtheir attention to smaller rooftop projects, prompting thegovernment in October to propose cuts for those facilities aswell. Industry groups sued the government last month to slow thelatest round of cuts.
The boom outpaced the government��s forecast. More than230,000 solar plants have registered to qualify for tariffssince the program started, according to Ofgem. Half of the 761.9megawatts in capacity installed last year was registered inNovember and December alone, the latest weekly data show. !
T hese figures compare with the Department of Energy andClimate Change��s projections for 284 megawatts by April 2013 and832 megawatts by April 2015.
Only 32 megawatts of solar installations were operating atthe end of 2009 before the tariff came into effect. Today, thenumber may top 1.1 gigawatts, according to Bloomberg New EnergyFinance figures, which take into account installations not yetregistered with Ofgem.
Those facilities may cost about 373 million pounds ($572million) a year in subsidies, exceeding the government��s cap forthe subsidy, the London-based researcher estimates. Support forthe industry is paid for by consumers though higher bills.
��Embarrassing��
��It is somewhat embarrassing for an austerity-focusedgovernment,�� said Jenny Chase, lead solar analyst at New EnergyFinance.
The program, which also includes other low-carbontechnologies for projects with 5 megawatts or less, has aspending limit of 867 million pounds by April 2015. In December,DECC said that a further 197 million pounds from the renewableobligation system that supports renewable projects of all sizeswas also available for the tariffs.
��The current high tariffs for solar PV are notsustainable, and changes need to be made in order to protect thebudget, which is funded by consumers through their energybills,�� Climate Change Minister Greg Barker said in a statementon Dec. 22.
Germany and Italy
European countries such as Italy and France reduced tariffslast year before schedule to adapt incentives to crashing panelprices. Meanwhile, Germany marched ahead without any spendingcap to install a record 7,500 megawatts last year, or about 10times British levels. Italy has a spending cap of 6 billioneuros to 7 billion euros ($7.6 billion to $8.9 billion) a year.
The surge in installations, coupled with continued declinesin panel prices, led the government in October to proposecutting in half rates paid for small projects starting Dec. 12,four months before scheduled.!
A court deemed the decision to cut rates before aconsultation on the matter was completed ��unlawful�� andordered a judicial review. A government appeal is likely to beheard tomorrow, so it��s unclear when the subsidy reductions willtake effect.
The U.K. solar industry is waiting to learn the new tarifflevels and the date when they will come into force.
��The situation is still far from clear, and industryplayers would be wise to sit tight until a new reference date isset,�� said Clare King, a London-based renewable energy lawyerat the law firm Osborne Clarke. ��The lack of certainty is goingto make it difficult for solar companies, homeowners andinvestors to plan for the future.��
No comments:
Post a Comment