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Industry sceptical over FiTs paper

 

The renewable energy industry has expressed doubt over the Government's willingness to introduce a feed-in tariff (FiT) model which stimulates the consumer's appetite for solar thermal heating, biomass heating and domestic combined heat and power systems.

 

The remarks were made after John Hutton, secretary of state for Business, Enterprise and Regulatory Reform, announced a consultation on FiTs for the technologies last week.

 

FiTs are the procurement mechanisms under which utility companies are obliged to pay premium rates to householders for excess green energy they sell back to the grid.

 

The Government has long resisted pressure from environmentalists and the renewables industry to introduce the financial incentive mechanism. Instead, it has chosen to rely on its Renewable Obligation, whereby utility companies source increasing amounts of energy from green sources as a means of meeting its EU-imposed climate-change targets.

 

Graham Meeks, director of the Combined Heat and Power Association, applauded the Government's U-turn but remained sceptical. 'This is a welcome step forward,' he said. 'However, the devil, as ever, is in the detail. First, it's vital that any FiT that's introduced embraces the whole range of microgeneration technologies available. Secondly, we really need to understand what it's worth.

 

'Whether FiTs are a success or not depends very much on the value placed on the tariffs; whether the price paid back to the customer for any excess green energy produced offsets the costs of buying and installing the technologies,' Mr Meeks explained. 'After all, we are asking the consumer to make a significant spend from their discretionary spending budget.'

 

He also said the German FiT model, which had been lauded for spearheading the country's green revolution and creating 300,000 jobs, was not being explored by the Government: 'The Government was very careful to make a distinction between the circumstances in Germany and the circumstances in the UK.

 

'In Germany, a very analytical approach was taken and FiTs became part of industrial policy. They were supported with soft loans further up the supply chain. John Hutton said he was not convinced that he wanted the UK to go down the same route, particularly with the solar photovoltaic market.'

 

Mr Meeks concluded: 'There could be huge benefits to the UK if it were to take a similar approach. I've not seen any real willingness from the Government that shows that it is willing to introduce FiTs as part of its industrial policy.'

 

Howard Johns, chairman of the Solar Trade Association, called into question the Government's commitment to FiTs: 'We're happy that solar thermal is one of the technologies that's been chosen for this future consultation,' he said. 'But I don't believe it's a done deal, despite the political pressure that's been applied because of David Cameron's support for the mechanism.

 

'A watered-down version of FiTs was included in the Energy Bill last month and Labour is still trying its hardest to get this thrown out.'

 

In a statement, shadow secretary for business Alan Duncan said: 'This hesitation over critical decisions has Gordon Brown's fingerprints all over it. If we don't act now to encourage renewable energy, we'll still be playing catch-up in 20 years' time.'