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UK Energy: No Plans to Get FIT for the New Year

24/12/2015 15:57 GMT | Updated 23/12/2016 10:12 GMT

Unless you've been staring at your feet when walking around, you can't help but notice that solar photovoltaic (PV) devices have been popping up on house rooftops all around the country. These days we as individuals are more empowered to get involved and make a personal contribution to renewable energy targets. This is largely due to the government introducing policies like the "Feed-in Tariff" (or FIT) policy, which provide a broad range of individuals with incentive to try these technologies out.

All this seems on track with the global pledge in the Paris 2015 Conference this month to tackle climate change. So why has the government announced abrupt cuts to this support?

A glance out of the window in my small town in the north of England displays a sprinkling of solar PV across many rooftops.

We have what we need in the UK to transition into a renewable economy - engineering capability, R&D to advance new technologies, and a government which can facilitate policies to engage business and individuals to play their part. But is the government thinking with this long term vision in mind?

What is the "Feed-in Tariff"?

The scheme was introduced by the UK Department of Energy and Climate Change (DECC) in April 2010. It applies to solar photovoltaic (PV), wind, hydroelectric power and anaerobic digestion schemes each with total installed capacity (TIC) of 5MW, or micro combined heat and power (CHP) installations with a TIC of 2kW or less.

The policy involves a guaranteed cash payment, a "tariff", which would be made to you if you chose to generate your own renewable electricity. You're entitled to payment for each unit of electricity you generate, whether you consume it in your home, or whether it's "fed into" the national grid.

Where does the money come from to pay people these tariffs? Government funding? No, the cost is paid for by energy providers who in turn pass them onto consumers.

What's happening now?

The Paris Climate Change talks in December 2015 struck a historic deal to keep global temperature rise below 2 degrees C (admittedly with no legally binding reduction targets). The UK signed up but the government's actions appear to contradict this pledge. Amongst these messages includes the government decision to substantially cut the FIT policy (although the severity of the proposed cuts were reduced, cutting the subsidy by 64%, rather than the 87% reduction originally proposed).

The government has announced other u-turns in promises pledged in their election manifesto. For example, cancelling its £1bn competition for carbon capture and storage (CCS) technology (to capture carbon dioxide emissions from coal and gas power plants and bury it underground rather than emitting it into the atmosphere).

The current UK Energy and Climate Change Secretary, Amber Rudd, has said that "support must help technologies eventually stand on their own two feet, not encourage a permanent reliance on subsidy". On one hand, she has a point: the FIT policy as a fixed-price pay-back was never meant to be a permanent scheme.

On the other hand, for the policy to be sustainable it must continue to engage and encourage people to install small scale renewable systems, rather than relying on the national grid and traditional fossil fuel energy forms. Solar firms argued that the sudden a cut would also have a devastating effect on the industry and cost thousands of jobs.

What should we be doing?

Yes, the price of solar technologies is falling, and yes, we can't rely on subsidies forever, but drastic cuts and a lack of a clear strategy forward in moving towards the ambitious Paris 2015 goals is an issue. A dramatic cut in subsidies just as the industry is gaining momentum is short sighted. To gain investment into new tech, market incentive and enough potential customers to make R&D investments worthwhile are needed.

In the past, those against the policy stated that boosts to renewable energy technologies do not offer good value with their power generation being too intermittent. Examples included the wind not always blowing to generate steady energy at peak demand, or the infrequent sunny days in Britain not justifying the cost of solar PV. This argument doesn't stand up anymore; energy storage technology in conjunction with wind power can help smooth the demand curve and the uptake in solar PV has meant increased R&D investment and a fall in cost.

The decrease in subsidies should tie in with a wider energy strategy and make use of emerging technologies. For example, the Institution on Civil Engineers advocated a change in policy to facilitate out-of-grid-connected electricity storage. It identifies that electricity storage complementing renewable energy policy is key in achieving affordability and reliability whilst decarbonising.

The current scheme has encouraged rapid and sustained deployment of schemes already constructed. It has brought more awareness, engagement and involvement of businesses and the general public in renewable energy technology. Changing the policy's mechanisms of deployment (rather than a straightforward cut) would be the more responsible action for the government. We have all the other pieces to make these technologies work in the long term; we just need a government willing to think for the long term, not just the next political term.