Saturday, 29 October 2011

Not the greenest of governments after all!

Another Con Dem promise of being the greenest government ever will be dumped on Monday when Chris Huhne the Climate Change Secretary will allegedly reduce the Feed in Tariff on renewable electricity from 43.3 pence a Kilowatt/hour to 21pence, or a 50% reduction. The claim in the report is that it is a levy on housholders electricity bills and the government are increasingly concerned about rising bills:
The feed-in tariff scheme, introduced 18 months ago, has been a huge success and has led to 100,000 households installing solar power.

This is because the levels on return on a typical £10,000 investment have been very generous, at about seven per cent per annum – far in excess of rates that can be found in the banks.

This has sparked a mini-solar boom, and from fewer than 500 companies employing about 3,000 people before the FIT was introduced, there are now 3,000 companies with a 25,000 workforce, which has been predicted to expand to 360,000 by 2020.

Yet the Government has become nervous of the subsidy's cost, as it is paid not from the Treasury but by a levy on household electricity bills – an increasingly sensitive subject – and wants to limit it.

..."Coming from a Government that said it would be the greenest ever, this is completely misguided and will be a devastating blow for the solar industry," said Howard Johns of Solar Trade Association.

"Solar installation will be limited to a few rich people, and all the installation going on in solar housing will stop. Hundreds of companies will go bankrupt."

What Howard Johns says is quite right, if the Feed in Tariff is reduced by 50% thousands of jobs in solar PV manufacture will go in places like Sharp in Llay as the reduced incentive will make people think again on spending £10,000 when it will take 18 years to recoup their original investment. Solar renewable energy generation will grind to a halt.

Arguments in support of a reduction in FIT are flawed; it is claimed that the FIT subsidy is paid through a levy on household bills which is quite right but which only adds 5% to the this to the 30 to 50% increase in energy prices over the last two years. The FIT subsidy is therefore money well spent to reduce our carbon footprint and to generate renewables

A rough calculation of the cost of the Feed in Tariff since its introduction in April 2010, is around £800 million (based on 100,000 houses having produced 3,500 KWh and being paid 43.3p per KWh), this is the same as the PROFITS of nPower and Scottish Power put together for the last year. Imagine what the profits of all the gas/electricity producers are? No doubt it would dwarf the cost of the FIT subsidy.

Chris Huhne and the Liberal Democrats in the Coalition have rolled over and acquiesced to the anti climate change Tory agenda.


Anonymous said...

Does that mean Wrexham Council's solar panel project has gone pear shaped?

Plaid Gwersyllt said...

Depends when the govt intend to reduce it from, 90 houses are getting done immediately.

Anonymous said...

90? Thats a bit of a joke, weren't thousands planned?

Plaid Whitegate said...

That's 90 being done this week, followed by another 90 the following week, etc etc