When the Energy Act was passed through parliament in November 2008 the wheels were set in motion for the introduction of the much hyped 'feed-in tariff' or FIT as it is often been abbreviated.
Those within the industry were all well aware that similar tariff mechanisms elsewhere have provoked massive investment in solar sectors which previously hadn't been on the green energy map. The 'We Support Solar' campaign was created as a mouth-piece for industry Design Company In United Kingdom members and environmentalists alike to voice the message that solar power is the most viable means of generating clean, affordable energy in the future but that this viability hinged on the introduction of a comprehensive and generous tariff rate. This last part was the main concern for campaigners who worried that the government would introduce legislation which would neither attract investment, nor render the industry economically viable. Fortunately, with the DECC's announcement of the Clean Energy Cash Back legislation (essentially a FIT) it now appears that the UK will have a bright, solar future.
A feed-in tariff is a mechanism whereby the government sets a law which guarantees a fixed, premium rate paid for electricity generated by renewable means. Traditionally, the benefits of solar electricity have been far outweighed by the cost of solar kits, installation and maintenance, something which has deterred investment and kept solar power as a low level, cottage industry in the UK. What the tariff does is off-set the obvious costs involved in the installation of solar plant by offering investors generous financial incentives for installing solar kit. The traditional energy companies in the UK will be obliged to purchase the solar energy at a price above market rates, the cost of this being spread over the consumers.
Even before the Clean Energy Cash Back announcement, the benefits to potential solar investors in the UK were being expounded. At the end of 2008 consultants, Ernst & Young reported that the UK had moved up to fifth place in a list of countries in an index entitled, Renewable Energy Country Attractiveness. Citing the impending introduction of the feed-in tariff and the relatively low value of Pound Sterling, the Ernst & Young report stated the UK's rise in the index would continue as investors eventually cottoned-on to legislation changes designed to incentivise investors. It was therefore no surprise that heading the list was Germany whose own tariff legislation has often been held up as the example of how to create interest in unchartered territory for many investors.
Confidence in the future of the solar industry has certainly never been higher within the financial sector. The global financial crisis has highlighted the importance to many the need to diversify their investments and also seek viable alternatives to petro-chemical investment. In March 2009, the fund manager of Swisscanto, Pascal Schuler announced that oil and natural gas in particular would become enviable as investments within the next 20 years. Talking specifically about his green investment fund, Schular asserted that,
"Water, solar and wind energy are areas where we invest in the long-term, as there is an over-average growth potential when financing kicks off again. Banks will prefer them when they start lending." Going on to add, "We will continue to invest in this segment but focus on companies which have a strong balance sheet and are able to survive this crisis".
A brief look at Google will show that there is now a real buzz around similar investments in the UK solar industry. Websites such as solarinvestment.co.uk are highlighting the excitement which currently exists in the young British solar industry, the future of which looks brighter than ever. However, confidence in the solar industry is not limited to those simply within the industry. Consultants and analysts are all putting across the message that solar installations are the most effective ways to offer consistent, high yields in tumultuous times for global financial markets. One such exponent of the solar sector is investment guru, Jim Mellon who has added his weight to the solar revolution. Mellon, has demonstrated his belief in the prospects for a solar energy future by investing in mining company 'Emerging Metals' which focuses specifically on metals required for the manufacture of components used in photovoltaic technology. Listed in the Times Rich List with a net worth of £500m, the financier who predicted the financial crash stated, "Solar is genuinely clean, it ticks all sorts of zeitgeist boxes. Within five years, solar power will be as cheap as oil and gas without the subsidy. It will be bigger than the internet in five years"
Of course, whether the solar industry will be bigger than the internet in the UK over the next half decade is open to debate. What is now becoming clear however is that the UK solar sector will have everything in place come 2010 to help the sector become competitive with industries in Spain, Germany, China, California and a number of other places.
In order to make the UK competitive with other PV behemoths around the world, British Prime Minister Gordon Brown has made it clear that he wants to establish a 'Green New Deal' making reference to the economic plan introduced by F.D. Roosevelt during the Depression to revitalise the US economy. In a statement, Brown said that moving the UK from a carbon to a green economy would not only help meet climate change targets, but also provide jobs in new industries which would be starting up. In a report released by Brown in March 2009, the figures stated that moving to a green economy would create up to 400,000 new jobs in the next eight years with an estimated 1.3 million people being involved in the UK solar sector by 2017. Gordon Brown, on a visit to Washington to meet Barack Obama declared, "We know that the more we are able to co-ordinate these measures internationally, the Design Company In United Kingdom
more confidence and certainty we will build and the more investment we will be able to bring forward. That's why I want to create a global 'green new deal' that will pave the way for a low-carbon recovery and to help us build tomorrow's green economy today".
With government backing, the UK is now in a strong position to build a solar sector which will be capable of emulating PV industries in Germany and Spain. In April 2010, the Clean Energy Cash Back (feed-in tariff system) will be introduced and the subsequent months will see a frenzy of activity both in the media and from investors as people attempt to join the industry in its infancy. 2010 will be a make or break year but it is now looking highly likely that as the economy goes out of recession and in to growth, the solar industry will reap the benefits of being both politically fashionable and financially attractive.
You need to be a member of On Feet Nation to add comments!
Join On Feet Nation