Is solar power Britain’s new sunset industry?

Government treasury departments don’t generally respond well to the idea that the environment matters, and here in the U.K. things are no different. Yesterday, Energy Minister Greg Barker announced proposals for a 50 percent reduction of the “feed-in tariff” — a program that guarantees homeowners an income for the power they produce from solar photovoltaics (PV). In doing so, he is widely viewed to have lost an argument with the Treasury about whether the government should keep its investment in domestic solar power at levels that support wide-scale adoption.

The original aim of the tariff, known as FIT, was to make solar energy attractive at both domestic and small commercial scale by giving investors confidence in getting a return within a reasonable timeframe.

It’s now all coming together as a classic British bodge, a story that begins with grandiose rhetoric and ends in penny-pinching muddle. The scheme — which only began in April 2010 — has been revised down three times in less than a year, with the change announced yesterday halving the contribution from 69 U.S. cents per kWh to just 34 cents — in just six weeks’ time, if the new proposals go ahead.

In essence, the program seems to have been a victim of its own success. Three times more applications have come forward than the government expected, and it seems the funding is being used up too quickly.

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