Climate Minister defends decision to appeal solar feed-in tariff ruling and insists ‘environmental Taliban’ remarks were reported out of context
Greg Barker has defended the government’s decision to appeal a High Court ruling that declared the coalition’s plan to cut incentives for solar installations unlawful, warning the feed-in tariff scheme has already exceeded its budget for the current financial year.
Speaking to BusinessGreen, Barker said he hoped the legal battle over the government’s controversial proposals to effectively halve feed-in tariff incentives for installations completed before the end of the consultation period would be resolved as quickly as possible.
The Appeal Court reconvenes next week and while the court will decide when the case will be heard the Department of Energy and Climate Change is hopeful it can be scheduled for mid-January.
Barker admitted he had to be “circumspect” over what he could say about the appeal case and refused to be drawn on the government’s contingency planning should it lose the appeal.
However, he reiterated that the continuation of the current 43 pence per kWh feed-in tariff rate for small scale solar installations would have “catastrophic consequences” for the scheme.
“Every one home that gets the 43p rate means there are two homes that cannot get the 21p rate,” he said, adding that the surge in new solar panel installations during the second half of last year meant the scheme had already exceeded its spending cap for this financial year.
“For the current year we are in the red and there is the potential that next year will be in the red. There’s some flexibility in the levy control framework [spending cap] on a year-by-year basis… But we have our budget and the Chancellor is not going to reopen the spending review.”
The overspend raises the prospect of deeper cuts to solar incentives in the future, assuming additional funds are not found to increase the scheme’s budget.
Barker gave short shrift to calls for the scheme’s spending cap to be raised, stressing that Chancellor George Osborne remained concerned about upward pressure on energy bills and as such the onus was on the department to make best use of the funds available to support both solar installations and those other renewable energy technologies eligible for the feed-in tariff scheme.
In addition, Barker confirmed the department was on track to publish its response to the consultation and its long-awaited comprehensive review of the feed-in tariff scheme by the end of January.
He said the consultation had received around 2,300 responses and departmental resources had been diverted as a result of the legal action brought against the government, but he insisted every effort was being made to confirm how and when cuts to feed-in tariffs will come into effect as quickly as possible.
“All parties want to see this resolved as soon as possible,” he said, acknowledging complaints from solar firms that it is currently unclear what level of incentives are available to new installations. “If we can get through this difficult period there’s still the potential for a bright future for solar and other microgeneration technologies.”
Barker confirmed the full review of the feed-in tariff scheme will contain proposals designed to avoid a repeat of the current row over solar incentives by making it clearer to the industry when reductions in support will be triggered.
“The proposal for comprehensive reform of the feed-in tariff system will much more closely align the falling cost of technology with the level of subsidy available,” he said. “We need to move closer to the system in Germany where the degression in subsidies is more predictable.”
He also hinted that he wanted to see tighter integration between the feed-in tariff scheme, the Renewable Heat Incentive, and the Green Deal energy efficiency scheme in order to help optimise building improvements and maximise carbon savings.
Asked whether he had any regrets over the handling of a consultation that has landed the government in court, Barker acknowledged that with hindsight ministers should have acted earlier to reduce incentives and address the bubble that was developing in the solar market.
Although he insisted that when the subject of earlier cuts to incentives was raised with the solar industry last spring the vast majority of firms advised that the government wait until April 2012 before imposing any cuts.
“In hindsight, we should have acted sooner, but we could only act on the basis of the evidence we had,” he said.
In a wide-ranging interview, the minister also defended his controversial use of the phrase “environmental Taliban” to describe critics of the government’s decision to hand £250m of tax breaks to energy intensive industries.
Barker used the term in a speech last month to the Associate Parliamentary Manufacturing Group and it was repeated in an interview this week with the Financial Times, prompting an angry response from some green groups.
He stopped short of apologising for the term, but insisted that it was deployed in a “light-hearted manner” and was not directed at green businesses, the vast majority of environmental commentators, or critics of the government’s proposed cuts to feed-in tariff incentives.
However, he argued that he had made a valid point about the intense and “counter-productive” criticism the government faced over Osborne’s announcement that energy intensive industries would receive £250m in tax breaks to help them cope with the cost of green policies.
“I was making a very serious point about how we decarbonise without damaging prosperity or undermining our environmental integrity,” Barker said of his “environmental Taliban” comment. “If we penalise energy intensive industries to the extent where they go abroad it might help the UK hit its carbon targets in the short term, but it will not help the planet one bit.
“In order to achieve our goal of cutting emissions 80 per cent we need British industry to work with us not move abroad. As just one example, the concrete and cement we will need for big industrial projects such as offshore wind farms and the biggest expansion of the rail network since the Victorian era will need to be produced somewhere. It would be a tragedy if these projects are wholly reliant on companies from abroad because we have made the UK a hostile environment for business.”
He added that Germany was already demonstrating how financial support for manufacturers impacted by environmental policies could allow a country to deliver an “ambitious renewables industry and ambitious carbon targets while having a growing manufacturing industry that competes on the global stage”.
Barker also rejected suggestions that relations between the government and green businesses and NGOs had become strained in the wake of the row over solar feed-in tariffs and a series of comments from the Chancellor that have been interpreted as heralding a watering down of the UK’s low carbon ambitions.
However, he did acknowledge that the government had to step up efforts to make people aware of the scale of the low carbon transition the coalition is committed to and the opportunities that will come with it.
“We need to do more to put our mouth where our money is,” he said. “In 2012 I hope we will see a greater articulation of the strong support there is for the big investments we are making in Britain’s green transition, not least because it is a huge opportunity for UK plc and will be a significant driver of growth and recovery.”
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