Government Slashes Feed-In Tariff For Solar Panels
Chris Huhne, Energy Secretary in the UK, may be taken to a judicial review by solar panel companies following cuts made by his department to large solar projects of up to 70pc.
In June, the government made the final decision to reduce the incentives offered to industrial sized solar installations.
This was following an earlier announcement they made to get rid of "hot money and speculators" from the solar industry earlier this year.
However, how sensible a move was this? The government's aim in introducing the Feed-in Tariff was to reduce carbon emissions to help the UK meet its carbon emissions targets.
The theory was that households would be incentivised to install solar panels because of the financial benefits they would bring, and therefore cutting carbon as they used renewable energy instead of buying electricity from their current energy providers.
The way the government scheme was introduced was via the Feed-in Tariff.
This is a gradual payment that homeowners receive back over time for having solar panels on their property's roof.
Whilst it did, and still does, make solar an extremely profitable investment, their nature means that it is a long term and large one to make - solar energy systems effectively tie people's money in for up to the 10 years that they take to pay themselves off.
This meant that companies with a lot of money decided to invest millions of pounds into solar energy, knowing that whilst they wouldn't be able to access it until the systems had paid themselves off, after 10 years or so, they would start reaping the rewards and making a very large profit from their initial investment.
The number of companies that wished to make such investments was very large, and the investments themselves were very large - with some farms reaching 32 acres in size, covered in solar panels.
Obviously, this means that the payments the government have been forced into are also correspondingly very large.
So, the government decided they didn't want to continue footing enormous bills like this for renewable energy generation.
However, carbon reductions are carbon reductions - the original aim was to reduce emissions, and so surely if companies are investing massive sums of money into solar power farms, then these firms will be making a massive step forward for the environment, which the government now seems to be dis-encouraging, so it seems they are contradicting themselves.
The reasons released by the government for this cuts revolve around ostracising large companies wishing to make a quick buck from solar panels, rather than the real reasons that the government must have made an underestimation as to how much the Feed-in Tariff would cost them in the long run because of the sheer number of solar panels that would be installed, whether it's on the rooftops of households, or on endless rows in solar farms.
In June, the government made the final decision to reduce the incentives offered to industrial sized solar installations.
This was following an earlier announcement they made to get rid of "hot money and speculators" from the solar industry earlier this year.
However, how sensible a move was this? The government's aim in introducing the Feed-in Tariff was to reduce carbon emissions to help the UK meet its carbon emissions targets.
The theory was that households would be incentivised to install solar panels because of the financial benefits they would bring, and therefore cutting carbon as they used renewable energy instead of buying electricity from their current energy providers.
The way the government scheme was introduced was via the Feed-in Tariff.
This is a gradual payment that homeowners receive back over time for having solar panels on their property's roof.
Whilst it did, and still does, make solar an extremely profitable investment, their nature means that it is a long term and large one to make - solar energy systems effectively tie people's money in for up to the 10 years that they take to pay themselves off.
This meant that companies with a lot of money decided to invest millions of pounds into solar energy, knowing that whilst they wouldn't be able to access it until the systems had paid themselves off, after 10 years or so, they would start reaping the rewards and making a very large profit from their initial investment.
The number of companies that wished to make such investments was very large, and the investments themselves were very large - with some farms reaching 32 acres in size, covered in solar panels.
Obviously, this means that the payments the government have been forced into are also correspondingly very large.
So, the government decided they didn't want to continue footing enormous bills like this for renewable energy generation.
However, carbon reductions are carbon reductions - the original aim was to reduce emissions, and so surely if companies are investing massive sums of money into solar power farms, then these firms will be making a massive step forward for the environment, which the government now seems to be dis-encouraging, so it seems they are contradicting themselves.
The reasons released by the government for this cuts revolve around ostracising large companies wishing to make a quick buck from solar panels, rather than the real reasons that the government must have made an underestimation as to how much the Feed-in Tariff would cost them in the long run because of the sheer number of solar panels that would be installed, whether it's on the rooftops of households, or on endless rows in solar farms.
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