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Solar and sustainability “to-do list” for the forthcoming UK solar budget on Wednesday 21 March 2012.

Filed under: Latest News

Solar news: UK-made solar panel supplier, Solar Twin Ltd, writes open letter to the Chancellor of the Exchequer about the March 2012 budget.

Dear Chancellor of the Exchequer,

Here are ten green budget challenges for your greenest government ever.

1/ Rebalance UK’s solar panel market. End the appalling imbalance in the solar panel market, one which has been created by DECC’s Feed In Tariff (FIT) scheme and which had smashed up the solar thermal market so that it is now at 20% of its past size. Do this by equalising the “years to payback” for both technologies, solar PV and solar thermal. Start off by giving a Renewable Heat Premium Payment of £800-£1200 for solar water heating systems on condition that they are Legionella-safe. Pay an extra £200 subsidy for PV pumped technologies (which are zero carbon in operation) as a way of promoting this particularly sustainable technology.

2/ Support UK renewables manufacturers. Deliver targeted support. Crucially, UK’s fragile renewable heat manufacturing SME sector  now numbers fewer than ten companies! Unless the UK merely want imports to be what fuel UK’s renewable energy future, support is needed right now. Innovation and green R&D, in-house intellectual property trawls, smart manufacture processes, strategic investment, and staff training all need immediate support. Please develop a UK package for green energy innovation and manufacture.

3/ End the stupid anti-environmental anomaly in the Renewable Heat Incentive which currently forces government to pay out taxpayers money for non-existent energy benefits. Right now if, for example a solar installation delivers, say 1000 kilowattt-hours of heat but needs 100 kilowatt-hours of electricity to deliver it (and some are as bad as this) then surely you should be basing your subsidy on 900 units of NET energy benefit and not 1000 units of gross heat. If you change to this sensible, method you will save 5-10% on your solar thermal subsidies and 20-40% on your heat pump subsidies. And you will incentivise best practice.

4/ Sort out today’s profoundly anti-environmental “Enhanced Capital Allowances” (ECA) Scheme which currently gives corporate tax breaks to users of the MOST polluting solar water heating systems and which fails to incentivise the development and installation of PV pumped zero carbon operation solar thermal systems. ECA Tax breaks should be limited to solar water heating installations which do not pollute CO2 during operation.

5/ Tell UK microgen consumers how soon carbon breakeven happens. Stop the industry go-slow and cover-up. Require all state subsidised and supposedly renewable energy technologies to undergo “life cycle analysis” so that for any typical installation users will be able to know how many years they take to reach carbon and energy breakeven, in relation to the carbon and energy what was invested in their manufacture. Make sure that UK’s “Industry-led” Microgeneration Certification Scheme is told to stops dodging this vital issue of consumer / environmental transparency.

6/ Introduce a green kit VAT reform scheme. The British Retail Federation have joined Solar Twin Ltd and many others in calling for zero vat on green energy goods. Full details are here. Barry Johnston, Managing Director of Solar Twin Ltd commented ”It is thrilling that this call is coming from the mainstream of retail business instead of just from green consumers and suppliers like us! While there is already a reduced rate of 5% VAT on installed solar systems, the most cost effective way to fit solar is as a DIY. However the VAT here remains at 20%. In my view, 0% VAT on all green energy kit is essential while taxes on environmental damaging activities should be raised to fill the funding gap.

7/ Increase VAT to 20% on dirty domestic fuels such as nuclear and fossils. Everyone’s gas and leccy bills should have two separate parts: (a) a dirty fuel line (with 20% VAT on it) and (b) a clean generation line (at 0% VAT). This transparent tax divergence would spur the implementation of renewables. The majority of the huge extra funds raised should be redistributed to combat fuel poverty and the problem of high standing charges for fuel.

8/ Unbend UK’s energy and renewables markets. Fund OFT and BIS and DECC to set up a special “energy markets unit” so that UK energy markets, including renewable energy markets are fairer and far more transparently policed. The dominance of the Big Six energy companies needs to be addressed, just as much as the pathological dominance of some incumbent old renewable energy technologies. UK is at a crucial emergence stage for renewable energy and there are huge market abuses and manipulations taking place which need close and special attention to prevent innovative products and business models from being smothered at birth. Be open about regulation, not secretive. Put the regulation of the UK microgeneration market onto a statutory footing. It is currently appallingly self-serving, by being voluntarily self-regulating. The environment and the consumer have both been sidelined. We can tell you loads about mafia-type conduct.

9/ Cut transport. Green up the remaining transport. Transport-related air pollution kills. Spend much more on cycling and on reducing the need to travel. Decentralise and localise services. Calm city centre traffic to 20 mph. Only give tax breaks to people using electric cars when they charge them at home using a low carbon a green energy tariff. Stop train companies for ripping people off. For example, Virgin trains charge an extortionate £240 for many return tickets from Chester to London while some flights from Manchester are half that price. Make train travel affordable. Tax aviation fuel at the same rate as road and rail fuel. But most of all, cut the need for fuel-based transport in the first place.

…and last but not least…

10/ Find finance for, and regulate for, energy reduction. Reduce before you produce. Insulate before you generate. Be aware that the Green Deal is merely a commercial interest-bearing loan scheme, which aims to get insulation fitted (where it previously could not be given away free). Do not rely soley on this seemingly over-hyped mechanism as a solution. While Green Deal may work to some degree, it is important not to lose sight of all the other complementary measures which can drive UK’s energy reduction revolution. The industrial revolution started in UK using coal. You now need to re-energise it using renewables and efficiency.

Good luck!

 

Sunny regards from Barry Johnston.

 

 

 

 

 


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