Solar News 9 June 2011.

Scottish Power has just raised gas prices by 19% and electricity prices by 10%. Generally when one energy company does his the others follow, so will there be an avalanche of price rises by other utilities? One wonders, if a utility can raise gas prices by 20%, then why can’t our government increase VAT on dirty domestic fuel by 15% in conjunction with an real increase in benefits to offset its socially negative impacts? Higher taxes on dirty fuel would reduce the need for so many costly green energy subsidies.

Oil prices rose because OPEC failed to agree to pump more oil in response to increasing global demand, resulting in a surge in wholesale oil and gas prices. It seems that because some countries were already pumping at full flow and that those countries such as Saudi, who have reserve pumping capacity, were outvoted.

Today the UK government formally slashed grants for solar electric (Solar PV)   panels for large and medium sized installations in its fast track (ie panic) review of the Feed in Tariff Scheme. These savage cuts of over 50% in some places beg the question about the next (slow track) review of small scale and domestic PV installations: how much will they be cut, and how soon?

UK’s domestic feed in tariffs remain one of the most generous in the world. It is 65% more generous than Germany’s. Time to go solar before the grants get cut? More and more people think so given that return on capital can exceed 10% for some installations.

Buy solar PV RIGHT NOW or miss the grants boat!

Responding to the cuts to medium and large scale solar photovoltaics, the Renewable Energy Association’s Chief Executive Gaynor Hartnell said:

“We don’t support this. The logical approach would have been a 25% reduction across the board, irrespective of size.   This is on account of panel costs falling significantly, a phenomenon expected to continue so that PV should need no subsidy before the end of the decade.

“We think Government should increase the size of the Feed-in Tariff budget and encourage a healthy PV industry to establish in the UK.   But to be fair to the electricity consumer, Government must be prepared to intervene to reduce tariffs when justified, and the industry must accept this needs to happen.

“The handling of this whole affair has been poor.   Larger-scale PV has been demonised, when it is the most cost-effective approach.   Midway through this decade we’re expecting its cost to be on a par with offshore wind.”

There is good news, however, in that there are new tariffs for small-scale anaerobic digestion. In response Gaynor Hartnell said:

“At a time when other technologies are being cut back, these modest increases are welcome. On-farm AD brings a wide range of environmental and waste management benefits and we are glad to see these being recognised.

“We look to the forthcoming anaerobic digestion strategy and the Renewable Heat Incentive to complete the picture so that the sector can take off in the coming 12 months.”

Barry Johnston of Solar Twin Ltd said today:

“The UK needs need a steady economic environment for renewables. It is crazy to ask solar installers to train up and invest in new vans – and then to pull the rug away from under them as soon as they are ready to start installing solar panels. The good times may be running out for people who are considering domestic solar PV.”