Offshore, Project Development, Solar

Green Gives Way to Blue

When the freshly-minted UK coalition government boasted it would be the “greenest government ever,” it sounded like a bad joke. How could the Tories possibly pull off such a feat? The Liberal Democrats had a good manifesto and a track record of support for green policy, but the Tories? Their constituency has arguably never embraced green thinking, so why should they change now? A reasonable question. Surely it’s a horribly cynical ruse to persuade more voters in their direction, many said. A few bike rides to work and a failed rooftop turbine from David Cameron does not a green government make. The fact that a huge car used to follow him with his shoes and briefcase did little to burnish his credentials.

But then the new government started talking about a mass of green policy tools they would use to bend the economy towards new energy generation and efficiency. They would legislate and we would innovate! We would drive carbon out of the economy and seize the benefits and opportunities in doing so! Wonderful stuff. 

But then came the Comprehensive Spending Review late last year. The CSR. Three letters, one acronym, abject fear and loathing in the solar sector. The feed-in tariff, which had created many thousands of jobs across the country and seen thousands of installations in a matter of months, was already under threat. Those of us invested in the green promises turned white with fear as the scalpel carved and slashed its way through departmental budgets, excising whole departments and programmes at a stroke. But the FIT survived, for the time being. Again, jobs, installations and tax receipts continued to flow. 

At this time, I began a study of the UK FIT, deciding to drill down into the user experience, to find out how different groups were working with it. It was designed to produce some qualitative data, a vital treatment of a complex policy area. It is after all a human policy, not just a technological one. It is about real people, outside the traditional energy sector, becoming personally experienced with energy production – and hopefully efficiency measures; becoming energy literate. The period of the study,  through winter 2010/11 turned out to be the golden period for the solar portion of the FIT. Everyone seemed to be confident, to be working hard to get things done, to get domestic, community and commercial energy projects built, to find ways to get solar onto social housing and reduce occupants’ fuel bills.

Interestingly, my conversations with government were giving me no hint that they found solar particularly appealing from an industrial policy point of view. They had a 25-GW energy gap to fill in the next ten years, and solar was not going to do it. They had an interest in offshore wind and marine technologies, they wanted to develop competitive advantage in less mature technologies, not take on the German and Chinese panel makers. The Treasury apparently had concerns over the FIT interfering with the capacity of citizens to pay tax, and that it was some kind of blot on the national balance sheet. This was my impression. 

So, it was not with great shock or surprise, but a kind of weary resignation that I heard the rumors that began to swirl about a massive FIT cut. After all, from the government’s perspective, what’s the point of putting money into something that won’t deal with the energy gap or create major new industrial exports?

The question is, how does that trump the creation of 29,000 jobs? Or the £230 million pounds per year in tax receipts from the industry? A study commissioned by Friends of the Earth states that jobs and tax receipts will be the costs of cutting the domestic PV tariff in half. They are part of a coalition campaign called “Cut Don’t Kill.” They have presented facts that few could argue with, and in fact Friends of the Earth are taking the government to court seemingly on the basis that the FIT rate cut has been scheduled to take place before the consultation on tariff rates even closes. In addition, Carillion, the one of the largest installers in the country, has warned of up to 4,500 job losses due to the rate cut. Right now we have a crisis of unemployment; it is at a 17 year high. Youth unemployment is now almost 22 percent. Training programs for solar, and the job creation potential they touted for the sector, must all now be revised down drastically.  

Earlier on the evening I wrote this article, I attended a lecture by Jonathon Porritt, if I may say one of the grand “old” men of sustainability, and I asked him if he had any thoughts on why the Treasury managed to behave in this way. A terrible pall fell over his affable countenance, and his satirical verve left him. I felt slightly bad for asking. He looked up, turned a weary eye on the university audience and spoke in a sincerely pained manner, talking of the seeming fixture in the department of ideologues, who could act as they saw fit, regardless of which party holds office. Could this be true? Could ineradicably entrenched individuals in quiet back offices decide the fate of our nation, drawing plans against our collective advancement? Given his long experience in Westminster, it seems reasonable to allow for the possibility that there is some truth here. His report The Greenest Government Ever: One Year On, highlights the failures of government pledges on the raft of green policy areas they set out on from the beginning of this Parliament. 

I asked the general manager of a local PV company for his thoughts on the FIT cuts. What I can print is that in his view the cut is not so bad, but with the addition of the hellish OECD growth forecast for the UK, there will inevitably be a downsizing in the UK PV industry. The impending German FIT rate cut has also lead to stock being drawn into the German market. Adding to this the fact that the government has made the deadline a Sunday night, and that there was only a few weeks warning of the cut, it becomes very hard to get more installs completed. He hopes to retain core staff, but fears subcontractors may not be so lucky.

All in all, if you are an advocate of solar, and of domestic generation, it’s a sickener. The one area of real growth in the UK economy since the beginning of the financial crash is being hammered, for reasons no one seems to fully grasp. So I consider the industrial policy implications of PV in the UK, and the energy gap; I think too of everything Hermann Scheer ever told me about the dominance and ugly tactics of the big energy companies, their hatred of feed-in tariffs, and the fact that they have apparently been very poor at paying out to PV generators here.

Taken together, one could speculate that there may have been significant political interference from vested interests, or that the influence of the Treasury has prevailed. Jonathon shared in his lecture word of a report that is due out in the next two weeks that tracks the rhetoric from George Osborne, the Chancellor of the Exchequer, from pre-election to today. There is the duet with David Cameron at the beginning, singing in harmony off the same hymn sheet. Then over time it begins to plateau, before beginning a dive into the low octaves that now finds him openly hostile, using terms like “bulldoze” with regard to any environmental legislation that stands in the way of economic growth. This has left Chris Huhne, the Lib Dem Secretary of State for Energy and Climate Change, with a hard road. A penny for his private thoughts on all this

In the context of the above, the recent statements from Greg Barker, the Energy Minister, on drawing up specific plans for community PV sound hollow. We’ve believed them before. The FIT was introduced on April Fool’s Day, and now feels like some kind of government prank. But the laughter has long faded, the green promises too, there is nothing now but the Tory blues.