The recent decision by the Government to retrospectively reduce the level of feed in Tariff (Fit) from 43pkwh to 21pkwh is a a huge blow to the UK’s environmental credibility. Originally introduced by the previous Government the latest decision is based on the fact that take up by homeowners and businesses has been greater than expected – in other words the scheme was too successful! Can this really be possible when the aim was to reduce our carbon footprint?

Perhaps the most damaging aspect is the undermining of confidence in legislation relating to sustainable technologies. Potential investors are faced with making an enormous financial commitment in the face of number of uncertainties; longevity of the technologies, capital cost of the installation and financial return on that cost.

For the first time, under the FiT legislation the log jam began to clear; income was guaranteed for 25 years and Government backed, PV technology was tried and tested and had reduced in price and critically (as a result of these factors) the banks felt confident enough to start lending money for PV installations.

The first big step backwards came last year when the Government decided to limit FiT’s to installations under 5 megawatts. This meant that a number of big, commercially driven PV arrays became unviable over night. The second blow came in December with the reduction in the level of FiT’s.

The Government made the following statement in one of its recent publications;

To facilitate the investment in renewables that the country needs, investors need to have confidence in a stable and predictable commercial environment for those investments. The scale and pace of the changes now proposed was a ‘shock’ for the industry and the suddenness of their introduction has damaged investor confidence across the whole energy sector. This damage would not have occurred if the Government had recognised the unsustainable rate of the expansion of solar installations at an earlier date, something which ought to have been identified by Ministers and officials sooner than it appears to have been. The analysis of the impact on jobs in the Impact Assessment is also seriously inadequate.

We in the UK are not alone in introducing FiT’s as a way of reducing our dependency on fossil based energy generation. Most northern European countries have done the same. In Germany for instance it has led to around 13% of the nation’s energy being generated from renewable sources.

So, as the Government awaits the result of a High Court appeal on it’s decision to apply it’s Fit reduction retrospectively we’re left wondering whether the Government now see the UK’s bold carbon reduction commitments as an essential necessity or an unaffordable luxury?