Friday, October 28, 2011

No more PV subsidy for energy inefficient buildings - Barker

Solar pv on domestic roof
Greg Barker has told the domestic solar industry that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards.

Speaking at the Solar Power UK conference yesterday in Birmingham to an audience of PV installers angry at the cut in Feed-in-Tariffs for PV that has thrown their business models onto the rubbish heap, he defended the cuts but then said that there will be "no more PV subsidy for energy inefficient buildings".

Barker admitted in his speech: "It cannot be right to encourage consumers to rush to install what are still expensive electricity generating systems in their homes before they have thoroughly explored all of the sensible options for reducing their energy consumption first".

This is an official acknowledgement that the Government's three key domestic energy policies have been implemented in the wrong order.
Since it is more economical to improve the energy efficiency of a property than to install generation capacity, the first policy should have been the Green Deal, followed by the Renewable Heat Incentive, then by the Feed-in-Tariffs for renewable electricity, a reversal of the actual order.
This is because renewable heat is more efficient and practical on the domestic scale in this country than renewable electricity.
Mr Barker drew back from announcing the widely expected cuts to the subsidies for PV electricity from 43p per kWh to around 20p per kWh, and refused to take questions from delegates, who fear that the cuts will kill their industry.

Instead, he told them that he expects the successful renewable energy companies of the future will be more like Energy Service Companies (ESCOs) in the sense that they will "diversify into new sectors and join the transformation of the energy efficiency market" with the same "gusto" as they have microgeneration.

ESCOs sell the service of energy supply, and so it is inherently in their interest to do so in the most efficient way in order to maximise profit and competitiveness.

Barker said that the forthcoming Comprehensive Review of the tariffs which DECC will soon hold, will seek ways to put FITs in the context of a "whole-house approach which prioritises energy efficiency and supports the right low-carbon heat and electricity technologies".

The consultation will also ask how business premises and non-domestic sites should be treated in the future.

Barker promised that the scheme will also be streamlined to make sure it works with the minimum of bureaucracy.

In an attempt at contrition, he did confess the need for "much greater coherence right across the green agenda" to synergise the Green Deal and energy efficiency measures, Feed in Tariffs for Microgeneration and the RHI.

He said he hopes to put an end to "stop start reviews". "We owe you that much," he told the sceptical PV industry representatives listening and thinking about their job security.

He said that the lower tariffs would mean "uptake" of the FITs "could continue to grow in a sustainable way" - sustainable to the Treasury budget, that is.

"The future of solar PV in the UK needs to be one based not on subsidy but on sound underlying economics," he explained.

Solar thermal

He therefore emphasised that he wants solar thermal water heating to have an important role.

In most parts of the country this can cut gas or electric water heating requirements by around 40% over the year, and so have a much bigger impact than solar electricity on bills and carbon reduction.

Barker said he is "keen to see a much greater integration of solar thermal and PV offerings in the marketplace – providing consumers with the best advice and the right technologies for their situation".

He also said that he will shortly be announcing support for 34 renewable heat projects from social housing providers, valued at over £4m, which represents "an increase of 33% on the original budget set aside for this competition".

Reclaiming the green agenda

Both Barker and Chris Huhne have been keen this week to try and undo the perception of damage to the Government's green image caused by George Osborne's recent pronouncements.

This subject was debated in the House of Commons yesterday, where MPs discussed a composite motion suggesting that most of the Government's avowedly green policies were failing.

These include the attempts to attract global investment in environmental technologies; the Waste Review, the planning regime changes, and the 27% cut in flood defence investment. It also called on the Government to "ensure mandatory carbon emissions reporting for all large UK companies to kick-start green jobs and growth".

Defra minister Richard Benyon hotly defended the Government's record against Labour and Green Party criticism.

Voting was split exactly on party lines with the 302 Tories and LibDems voting against and the remaining 222 voting for the motion.

New source of company advice

Outside of all this political jockeying, the Carbon Trust continues its steadfast work to make it as easy as possible for companies to save energy and money.

It latest wheeze, launched yesterday, is a new limited company, Carbon Trust Implementation, which will help UK companies reduce their energy costs and install greener, more efficient technology.

It is to provide independent, objective evaluation of the most effective energy efficiency and renewable energy technologies for a company; and help them choose "trusted, accredited suppliers" to carry out the work, as well as helping customers to run competitive tenders for their projects.

In order to make up for the cuts in public funding to the Trust, the service is funded by a flat rate commission from suppliers. This also means there is no cost to the company itself in obtaining this support.

Tom Delay, chief executive at the Carbon Trust said the new business "will help unlock £9 billion of investment into energy efficient equipment".

"We are confident that our new business will catalyse organisations to take action and in turn benefit from implementing cost effective energy efficiency and renewable energy projects and help the UK capitalise on green growth,” he said.

This is because it dovetails with the flexible Energy Efficiency Financing scheme that the Carbon Trust and Siemens Financial Services Ltd (SFS) launched in April 2011.

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