The current growth in the solar PV industry has far exceeded the targets set down by DECC as part of the Levy Control Framework in October 2010's Comprehensive Spending Review. It is clear that the spending envelope set at £80 million for 2011-12, and at £161 million for 2012-13 will be breached. It seems likely that by the time the FIT eligibility date passes, close to 700MW of PV will have been installed under the FIT scheme, roughly equating to a £250 million allocation each year. If correct, this will mean that much of the £269 million earmarked for 2013-14 will also be allocated to current installations fully 16 months before the 2013-14 year even starts.[1]

The solar industry is the fastest growing industry in the UK, creating over 22,000 jobs in 18 months and delivering £276 million per annum in tax revenue and VAT receipts. Even allowing for the huge uptake in solar PV through the FIT scheme, the solar PV industry is providing a net gain of between £25-£50 million per annum.

The deepest concern for the long term future lies not in the recent FIT review but in the possibility of further damaging cuts or initiatives such as the proposed energy efficiency measure, designed specifically to limit the industry to remain within the CSR cap at all costs. To victimise an industry which is creating a huge number of jobs, creating net wealth for the UK and which is providing quick and effective action at reducing carbon emissions and changing consumer's behaviour, seems illogical in the extreme. By DECC's own admission, the FIT is likely to add £26 a year to a consumer's bill by 2020 if the FIT is left unchecked. British Gas increased its customer's annual energy bill by £190 in July 2011[2], before that it increased its prices just 6 months earlier in December 2010. The most encouraging take-up of renewable energy generation to date is thus dwarfed by annual increases – and profits – of the country's Big 6 suppliers.

If the CSR cap is not revisited, then it is only a matter of time before the industry is destroyed. If the CSR spending envelopes are not increased then it is inevitable that the solar industry in the UK will be dead in 12 months time. We would urge DECC to consider moving under spends on other renewable initiatives such as the Renewable Obligation, to help increase the CSR cap to a level which creates long-term stability for the industry.

Most industry experts believe that within 5 years the solar PV market can reduce the costs of installation and thus the cost of generating electricity from PV so that it is broadly comparable with the cost of buying electricity from a supplier. When grid parity is achieved, that is when the Feed-in Tariff is no longer required. However, for the fastest growing industry in the UK - which is still in its infancy - it seems entirely illogical and counter-productive to Government's claims as the 'greenest-Government' to put substantial barriers in the way to continued growth.

[1] Spending envelope available for FITs
2011-12: £80 million 2012-13: £161 million 2013-14: £269 million 2014-15: £357 million

[2] http://www.ukpower.co.uk/home_energy/price_updates