The European Commission has confirmed that the UK government could face legal action over plans to reduce Feed-in Tariff rates if it is found to threaten progress towards the UK’s binding EU target on renewable energy.
The UK is required to source 15 per cent of energy from renewable sources by 2020 under the Renewable Energy Directive 2009.
The news came in response to Green MEP for London, Jean Lambert’s priority question on what steps the commission would take if the UK was found to be threatening progress towards the target.
However in his response, Energy Commissioner, Günther Oettinger stated that while the Commission has been in touch with the government over the planned cuts, several member states have already acted in similar fashion due to “very significant reductions in the production cost of photovoltaic panels”.
Several contractors have announced they are scaling back operations in solar photovoltaic panels, including Carillion who have confirmed they will now look at outsourcing their solar installations.
However renewable energy firm Strategic Energy has secured a £10 million funding framework agreement with independent specialist investment manager, Hazel Capital LLP, to finance the installation of solar pv to social housing properties in the north and north-west.
The first phase of the partnership is underway and will see the company install solar panels to some 350 homes owned by registered social landlord, St Vincent Housing Association in Rochdale, Oldham, Bolton and Manchester, to be completed by 12 December, the new cut off point for the higher rate Feed-in Tariff.
Funding for the second phase is in discussion and will potentially include a further 3,000 photovoltaic panels which will be installed to 300 properties in the Lancashire area, all owned by St Vincent Housing Association.
Strategic Energy’s director, Martin Davidson said:
“The funding comes at a pivotal stage in our development and will significantly accelerate our growth strategy in social housing. We are totally committed, along with our partner Strategic Team Group, in developing a leading renewable energy services business, specifically targeting the social housing sector.”
The government’s plans to cut the tariff will see payments for electricity generated by solar energy fall from 43p per Kwh to just 21p – a move which has been slammed by the solar industry, green groups and opposition parties.
Ms Lambert said: “At the same time as world leaders meet in Durban to negotiate a new binding agreement on climate change, the UK government is attempting to rush through foolhardy and damaging changes to an incredibly successful renewable energy scheme which has resulted in 100,000 solar installations, the creation of over 22,000 jobs and almost 4,000 new businesses.
“Rashly withdrawing support from this burgeoning industry will be disastrous for both our economy and the environment. Under the Commission’s ruling, the UK is prevented from making amendments to support schemes which could jeopardise the renewables industry, yet sudden, drastic cuts to the tariff will strip away investor confidence, reduce the market for solar companies across the country, and threaten jobs.”
She added that the government must now demonstrate that plans to slash the subsidy will not derail the UK from delivering 15 per cent of energy from renewable sources by 2020, or the Commission will have “no choice but to initiate infringement proceedings”.
Jean Lambert’s Priority Question, submitted on 8 November:
As part of the Renewable Energy Directive 2009/28/EC, the UK has a renewable energy target of 15% by 2020. A Feed-in-Tariff policy has been implemented as one key measure to deliver this target.
The UK Government is now planning to significantly reduce the solar pv FiT rates from those reported in its National Renewable Energy Action Plan to the Commission.
There is concern that this change will undermine solar pv installation and capacity and thereby negatively impact upon the UK’s ability to achieve the 15 per cent target. Will the Commission assess the impact of this planned change upon the UK’s capacity to make sufficient progress towards and meet the 15% target?
If this FiT revision or other weakened implementation policies threaten progress towards this target, what steps and proceedings will the Commission take?
Answer given by Energy Commissioner, Günther Oettinger, on behalf of the European Commission:
The Commission is aware of the planned changes to the UK support for photovoltaic energy and has been in contact with the UK authorities on the matter.
Following very significant reductions in the production cost of photovoltaic panels, the level of support for photovoltaic energy has been cut in several Member States.
Whenever Member States revise their support for support schemes for renewable energy, they need to do so in a manner which does not destabilise the renewable energy industry or risk undermining their own plans to achieve their 2020 targets. The UK is committed to reaching its target of 15% renewable energy by 2020 and to following the trajectory outlined in its national renewable energy action plan.
Should the UK or any Member State weaken policies in such a way that it would threaten progress towards their targets, the Commission would take action, launching legal proceedings if necessary.