28 Comments

• Tommy 9th Feb '12 - 4:34pm

  What about the fact that the vast majority of power used in this country is for industry, not in our homes and they already have the best tariffs, etc.

  Whilst I think solar power is a good thing is this really the best time to pass the high costs of it onto customers. As energy use doesn’t go up that much as you use more, increases in energy pricing hit the poorest hardest.

• Sarah whitebread 9th Feb '12 - 4:53pm

  Is Ed mixing up Cancun and Durban here?

• Penny Vingoe 9th Feb '12 - 5:06pm

  Thank goodness the Conservative ‘back benchers’ have recognised just how inappropriate are the subsidies being handed out to individuals who choose to make big profits by putting inefficient wind turbines onto their land. Imagine if you gave the £2 million that has already gone to just one local wind farm ownerin Wales, to all the individuals in the locality in order that they put solar on their roofs? Solar works even when the wind isn’t blowing….. and individuals would be helping themselves by reducing their own energy bills and doing their bit for the so called ‘Big Society’

• Paul Pettinger 9th Feb '12 - 5:17pm

  Dear Ed, please stop the massive indirect subsidy of nuclear power through fixing the price at which energy is sold. The coalition agreement said nuclear power would not be subsidized, but the spirit of the agreement is being subverted.

  Nuclear power has a very large carbon foot print due to the need to mine and process uranium (this just appears on someone else’s carbon balance sheet), and when you factor in all the long term costs is a very expensive form of energy production. If we are going to subsidize energy production in this way then there are renewable options that are much more deserving, while we are not going to have the problem that we thought we were in terms of serving our future energy commitments if ‘fracking’ is a realistic option, which it is increasingly appearing to be.

  Your civil servants are very well meaning, but I fear may not give you the balanced overview that you should be provided with regarding nuclear energy.

  I am very pleased that you have made the cabinet.

• Graham Tapper 9th Feb '12 - 5:21pm

  Sorry Ed but if you really wanted to encourage the take-up of micro-generation then reducing the FITS tariff is exactly the wrong thing to do. Anything that will radically extend the payback time for the investment in micro-generation solutions will discourage that investment, not encourage it. Anyway, if you were really committed to reducing Britain’s dependency upon fossil fuels for power generation then you would be introducing measures to change the Building Regulations to make it a requirement that all new property developments have micro-generation capabilities incorporated as built.

• paul zukowskyj 9th Feb '12 - 5:24pm

  Not quite sure how lowering the tariff people get is supposed to expand solar generation in private homes? Is it just me, or does the drop in tariff mean the total costs of installing solar go up meaning it is less attractive? It seems to me the effect will be less solar, not more. Not green, not particularly liberal and certainly not encouraging me to support the government’s stance. Ed, am a bit disappointed you’ve put your name to this….

• Paul Westlake 9th Feb '12 - 5:55pm

  Encouraging new research showing dramatic fall in solar costs http://gu.com/p/35aqz/tf Report available on DECC website http://bit.ly/qK9Cvg

• Peter Clark 9th Feb '12 - 5:59pm

  It seems to me that this is mainly an attempt to reduce the cost to Government by making Solar Panels less attractive. If the tarrif was to follow the reduction in cost and increase in efficiency we would see a 25% rather than a 50% reduction.

• jpmcc 9th Feb '12 - 7:30pm

  The fact is the Feed in Tariffs scheme, as we inherited it, helped too few people. With the cost of solar panel installation dropping dramatically in recent years, having an unnecessarily high tariff means fewer people can take advantage of it. By lowering the tariff we can extend it to more people – making clean, green, renewable energy available to the many not the few.
  I’ve read that a number of times, and it still doesn’t make sense. It’s perfectly justifiable to reduce the FiT payments in line with falling installation costs. It could also be argued that as the technology proves itself in practice, it’s less risky, and so the rewards (FiT payments) should decrease. But they still need to compare favourably with other investments.

  But IMHO, reducing FiT payments won’t help making clean, green, renewable energy available to the many not the few. The problem with the current system is that it works best for homeowners who intend to stay put for ten years or more, and have £10k spare cash in the bank. To extend the reach of the system, the government has to encourage schemes where people can buy a share in local community-based projects – through providing access to finance and targeted FiT payments.

  Not rocket science, but not current government policy either.

• Robin Hill 9th Feb '12 - 7:33pm

  Ed – congrats on getting job but please take more care with your arguments. We are adults. You are implying a fixed pot of money available for feed-in tariffs within the green budget, thus when divvied up more people can share in that pot, The weakness of this argument is that the lower tariff will persuade fewer people to install solar power, with the knock-on of lost manufacturing and installation jobs, It ignores the lost participation of individuals in increased green power consciousness. The feed-in tariffs seemed to be pinching because they were succeeding, and the attempt to reduce them was a precipitate knee-jerk reaction rather than reinforcing a public relations triumph by increasing the pot available. This could easily be achieved by reining in the subsidies given to overseas power generation companies for the installation of on-shore wind farms. Not only are these excessively generous but are already producing very strong local reactions both with their direct adverse environmental impacts and the press reports of massive payments to said foreign owner to turn them off – a PR disaster still unfolding.
  People will be more easily persuaded to accept increasing energy costs if they are encouraged to take personal action to ameleriorate them.

• Geoffrey Payne 9th Feb '12 - 8:24pm

  You have a hard act to follow, but I wish you all the best.

• Simon McGrath 9th Feb '12 - 9:10pm

  Amazing how many otherwise sensible Lib Dems want to increase fuel poverty by putting up power prices. Solar is a grossly inefficient way of generating electricity and the more solar there is the more prices have to rise to subsidise it.

• Kathy Smyth 9th Feb '12 - 11:50pm

  With reference to Robin Hill’s comment on onshore wind.
  You get the same level of subsidy whether you are a commercial foreign operator, a commercial uk operator or a community co-operative. but I wonder whether Robin would like to set out his understanding of the level of subsidy currently received by large scale onshore wind which he deems to be ‘excessive’ relative to other large scale renewable installations

• Steve 10th Feb '12 - 1:41am

  Yes the sudden premature reduction in feed in tariff was a confidence sapping blunder. But a properly planned gradual reduction in tariff, as capital costs come down, is only fair to the ordinary consumer.

  Ordinary electricity consumers more than recoup the tiny cost of feed in tariffs by the prevention of the runaway fossil fuel price rises that would occur, if renewables were not taking some of the load.

  Solar is not much good at night, or for most of the day in the winter when the sun is low. We need a mix of renewables and we need to provide for occasions when neither sun or wind is available.

  In a nuclear power station, the amount fuel used per unit of energy generated is very small. Hence nuclear power has a very low carbon footprint, even if carbon fuels are used in mining. The energy price floor does not subsidise nuclear generation, it penalises high carbon producers.

  Certainly we need to build to higher standards and improve existing buildings, but not all locations are suitable for renewables microgeneration. Over-shadowing and wind shelter can make solar PV and wind turbines unsuitable. Domestic CHP boilers use fossil fuel and heat pumps use electricity, most of which is currently generated from fossil fuel.

  Continuing to rely on fossil fuels and not encouraging investment in alternatives would heit the poorest hardest. As fossil fuel becomes more scarce, the rich will make sure they get more than their fair share by pricing out the local poor. On a world wide scale it is the poor who suffer most when climate change brings flood and famine.

• Steve 10th Feb '12 - 1:45am

  Sorry! Above shoud read “Carbon price floor” and “hit the poor hardest.”

• Robin Hill 10th Feb '12 - 10:34am

  Kathy is right to pick me up for singling out on-shore windfarm subsidy rather than citing both on- and off-shore wind. The points I was trying to make related to the effects of policy (especially the allocation of subsidy) upon the wider public consciousness. If our carbon footprint is to be propely managed it requires the population at large to become behaviourly involved, not merely have use rationed on price with all that results in terms of fuel poverty.
  The tapering of micro-generation subsidies with reasonable notice, and to reflect demonstrable manufacturing cost trends, is a reasonable proposition. However, the manner in which the individual household subsidy was suddenly halved just as it was beginning to gain traction, inviting a successful court challenge, needs to be regarded against a background of reports of power supply profit explosion and multi-million wind switch-off payments. Claims of wishing to widen direct public involvement in green energy seem at the least disingenuous in such a context.
  With regard to large-scale wind there is already in Wales a widely expressed feeling that, by reserving planning powers, Westminster reveals its lack of regard for the Welsh environment, ignoring the risk that that implies for tourism (the principal post-industrial economic and employment hope), regardless of local feelings . Micro-generation at least has the advantage of using the existing power distribution network for collection also; large-scale wind is a distributed generation medium which requires a whole new collection network. Even the product of off-shore generation must be brought on-shore, and the battle is only just being joined over the consequential development of sub-stations and pylon chains in some of the most environmentally sensitive parts of Wales and the borders.
  In determining this area of policy, which has such long gestation, the dangers of unintended consequence are already being shown to be at their greatest.

• Andrew Gibbs 10th Feb '12 - 11:01am

  The fall in prices for solar installations would make it reasonable to reduce the FIT rates to match, but trying to dress up the debacle at the end of last year as ‘making green energy available to the many not the few’ is a complete nonsense and serves only to make any other of your statements in this area hard to believe.
  If you want to be green then you need to do a lot more that put a few solar panels on houses: new homes must be built to real efficiency standards, not the half measures that allow construction companies to save a few quid. Make improvements in house insulation mandatory in the rental sector. Invest in light rail and bus schemes for those commuting to work, not poor value and environmentally damaging high speed rail for those who should be making use of teleconferencing. Implement more congestion charging/road pricing. Nuclear power is a long way from perfect, but needs to be embraced as the only meaningful medium term solution. Etc. etc. Maybe you will have to fight vested interests in big business, as well as apathy from the general population, but these are the things that I would be looking for from a ‘greenest government ever’.

• MarkG 10th Feb '12 - 11:03am

  Yes, I think most people have picked up that this article makes no sense and I am disappointed in Ed (who I have a lot of respect for) starting in this way. It bemused me when I got it as an email as well.

  Can I suggest the correct article would have said:

  1. We inherited an unaffordable scheme from the previous government.

  2. Unfortunately, we then made things worse by sitting on our hands for over a year, then reducing the subsidies without proper warning and before the consultation period expired leading to inevitable challenges in the courts and disrupting a lot of small businesses.

  3. Therefore, as my first step, I am going to withdraw the Govt.’s appeal, giving some certainty to small businesses and announce a proper consultation with the aim that we deal with some of the tariff issues to make sure that this isn’t just for rich homeowners who are going to stay put for 10 years.

  I think that would have got people back on side on this issue whereas the article above just annoys people who can see the obvious contradictions.

• Paul E G Cope 10th Feb '12 - 11:05am

  All gas CH users should move towards gas generators for their electricity. Only in this way can the vast amounts of heat wasted in cooling towers be redirected usefully to domestic heating so saving 18% of total UK energy.

  This still uses fossil fuel, yes, but in a far more efficient way. Power stationa are only 40% efficient. Domestic generation is nearly 100% efficient because the “waste heat” is not wasted.

  By the way, solar power is specially useful because it generates power when all the supermarket gondolas are
  going flat out to keep cool. – Paul E G Cope

• Peter Chivall 10th Feb '12 - 11:19am

  Like many others I wish Ed Davy all strength to his arm to resist all the real price fixers and market twisters from the oil and nuclear ‘big corporate raiders’.
  It’s obvious the way the solar PV FIT was suddenly reduced was at least partly a cock-up by civil servants (and sorry, Chris, on your watch), but it was also dictated by the Treasury’s insistence that the use of feed-in tariff to reward micro-generators, and the levy to consumers to pay for it, should be counted as public expenditure, despite not a penny of it passing through the Exchequer. Apparently, a few years ago the German treasury made a similar ruling and the renewables industry and various groups took them to the European Court of Justice in Luxembourg who ruled that it was simply a product of a regulated market and not public expenditure in any shape or form. Thus in Germany there is no global cap on expenditure on FITs and the renewables industry is thriving.
  One possible reason why the Germans support renewables so strongly (even though customers pay a levy equivalent to Euros100 per annum), is that the German constitution and German society have a very strong accent on local control and local initiatives. A district or community can invest in a wind farm whose electricity both helps supply local needs and surpluses can be sold to the grid on favourable terms. Any profits go to the local community while at-cost loans from the German ‘green bank’ keep the cost of repayment realistic.
  Liberals were the dominant force in the municipal ‘gas and water socialism’ that provided the first gas and electricity supplies to our towns and cities in the latter 19th century and early 20th century. With the technologies available in the ’30s, ’40s and ’50s it made sense to centralise power generation and build a centrally controlled grid to distribute it. It would be a great mistake to allow that model to dominate how we move to a low-carbon, renewable energy market in the 21st Century.
  As Liberal Democrats, decentralisation is in our DNA. So it should be with our energy policies. Best of luck, Ed!

• PK 10th Feb '12 - 11:46am

  The only south facing roof I have is on the garage which is approx. 2 metres by 3 metres. It would have been worth covering in solar panels with the old tariff but not with the new tariff. The new tariff seems to only benefit people with large south facing roofs i.e. more beneficial to the better off.

• Rob Banks 10th Feb '12 - 11:56am

  Ed

  If you are serious about solar power for the many not the few then I hope you will be able to look at two things:
  – muti – property installations such as for social housing schemes – this can make a real difference to the electricity bills for some of the poorest people but at present councils and housing associations are being deterred from doing this because the planned rate of return is just too low
  – community tariffs – panels on public buildings like school roofs and village halls run on a not for profit basis also need to be looked at again as again there are fears that the current rate of return will be too low to kick start the scale of investment needed.

  regards

  Rob Banks
  LGA Lib Dem Group

• Liberal Eye 10th Feb '12 - 12:26pm

  In fairness to Ed Miliband (for it was he as Minister that introduced FiTs) the plan did provide for and anticipate price falls in solar and it was expressly provided that tariffs would be reduced in April each year in line with falling costs.

  What went wrong was that it was not expected that large commercial operations would get into the act so aggressively (although given what is in effect an RPI linked guilt, it should have been obvious that they would) or the sudden and precipitate collapse in costs intrayear. So this blew the ‘budget’, hence Ed Davy’s apparently nonsensical (but in the circumstances of a fixed budget correct) observation that higher tariffs means less people can take advantage of solar. It also caused a panic at DECC which, sad to say, Huhne mismanaged; changing tariff mid year is not good, doing so without even allowing the consultation process to finish is hanging out your chin – and it promptly got biffed hard.

• Liberal Eye 10th Feb '12 - 12:32pm

  @ Rob Banks. Agreed. But can the Minsiter explain how it is that, as you put it, “…there are fears that the current rate of return will be too low …” at a time when the govt has just dished out yet another £50 bn in QE?

  The govt is making money super-cheap at the wholesale level (which may or may not be a good thing, but that is another story) so why is it not available cheaply or sometimes at all at the retail level?

• Richard Dean 10th Feb '12 - 6:47pm

  This loooks like we have become confused about the difference between short-term and long-term planning. Recovery is hopefuly a short-term exercise, but probably a middle-term one.Our economy is is really big trouble if green jobs are the only jobs that can help the economy to recover, or if we only focus only on green jobs to get the economy going. In the short and medium term, given that most jobs actually don’t do anything like the environmental damage they used to, our priority shoudl probably be the recovery, not the environment.

  Of course environmental management has short-term aspects, but the long-term issues are far more serious – global warming, sea-leavel change, chemical pollution from non-green technologies that may well be attractive to the 4 billion or so third-world poplulatipons as they develop first-world demands. Green jobs can usefuilly come from developing economical green technologies that those countries can buy to satisfy those demands. Certainly let’s try to create those jobs, but let’s not pin all out short-term and medium-term hopes on them!

• Ken Frere 11th Feb '12 - 10:37am

  Most of us will agree that harnessing more solar energy is a Good Thing. The problem is that, with payback times of 12 to 20 years even with the present Feed In Tariff, domestic installations are financialy unsound. Only the social benefit justies the subsidy.. Why then is the subsidy paid for by energy consumers who do not benefit ffinancilally from these installations? Because installers purchase less power from their suppliers they pay less, or perhaps none, of the subsidy included in suppliers’ tariffs. If there are to be subsidoes they should come from the whole population, not primarily from households which may have good reason not to install domestic systems.

• Roland Frankel 12th Feb '12 - 5:06pm

  One of the biggest errors which the previous government made was to restrict the availability of FIT schemes to those installed by “registered” installers. Succesive governments opt for this form of restrictive practice and in doing so, fail to understand how this skews the natural laws of supply and demand.
  Indeed, the cost of the hardware (mostly imported sadly) has reduced dramatically, but niether the householders or the government have been able to benefit due the the greedy (MICS registered) installers who are making a fortune on each installation. It is no wonder that they have the resources the take the coalition to the high court!
  There is no reason why small microgeneration solar schemes cannot be installed by any competent electrician or DIYer, with connection to the grid subject to a simple inspection by the electricity company as is the case with any new building. Do not listen to the installers when they say how hazardous and expensive it is to instal panels as they have a vested interest.
  To sum up, the best way forward and the way which will make solar energy available for many more householders is to deregulate.
  Yet another benefit is that it will greatly facilitate the option of taking the panels and inverter with you if you move house, in that way making your investment mobile as it might normally be in a bank.

• DavidC 14th Feb '12 - 4:26pm

  This speech by Davey makes absolutely no sense.

  By gutting the FITs for solar the way they have – first for 50 kW+ systems and then for smaller systems – the ConDems have effectively sabotaged the UK solar industry at the cost of thousands of jobs and all to save pennies on utility bills if they had simply honoured FITs payments as agreed. The ConDems have created uncertainty and thereby destroyed investment, jobs and CO2 mitigation efforts.

  Next we are told that The Green Deal “will lead an energy efficiency revolution in our homes”, but DECC’s own research suggests that “the number of lofts being lagged is set to plummet by 93 per cent.” as a result – http://www.businessgreen.com/bg/news/2137359/green-deal-suffers-setback-loft-insulation-lagging-plummets

  This speech by Davey offers some fine rhetoric and rousing promises, but all evidence suggests that it’s little but hot air when compared to the *reality* of what DECC and the ConDems are actually doing. And doesn’t that describe the LibDem election manifesto when compared to the reality of what they have supported in this toxic coalition?

  As Davey repeats the mantra of “the greenest government ever”, EDF are right now bulldozing fields and forests at a Site of Special Scientific Interest for a new nuke in Somerset that doesn’t even have planning permission. Excuse me for not believing what he says.