Green lobby calls for higher returns on investment in clean energy projects

Adding 10p per kilowatt hour (kwh) to the 36 pence proposed for 'clean energy cashback' scheme would create 30,000 jobs
Ashley Seager
The Guardian, Monday 5 October 2009
An alliance of construction companies, solar energy groups and politicians will tomorrow appeal to the government to increase support for renewable energy for households through its proposed Clean Energy Cashback scheme.
As the government's consultation period on the plan draws to a close, supporters of solar panels are urging the government to increase the amount that home owners would be paid for every unit of green electricity they produce. Just adding 10p per kilowatt hour to the proposed 36p rate would create 30,000 jobs in the next five years, the industry says, by driving demand for 400,000 new installations by 2014.
The scheme, usually called a feed-in tariff, has been successfully used to boost the roll-out of renewable energy technologies across Europe. In July, the government pledged to introduce a similar scheme in April next year.
But its aim of producing returns on investment of 5-8%, depending on the technology, is too low. Germany, for example, typically offers around a 10% return which has seen renewables take off rapidly.
The shadow energy minister, Charles Hendry, said: "Feed-in tariffs are crucial if the kickstart in microgeneration is to happen, but it will undermine the point of introducing the Clean Energy Cashback if the rate is not sufficient to drive domestic and commercial uptake of the technologies."
Brian Berry, of the Federation of Master Builders, said: "The FMB would welcome any change to the proposed Clean Energy Cashback scheme that maximises solar jobs for our membersat a time when many of them are really suffering as a result of the recession."
"The construction and solar industry work in close partnership, with roofers up and down the country now being trained to install solar electric roof tiles. By increasing the clean energy cash back level by at least 10p, the government is kick starting economic recovery in the construction industry - allowing solar energy to play a significant role in the greening of our housing stock."
Alan Simpson MP, special adviser on the scheme to energy and climate change secretary Ed Milliband, said Labour should not be so timid.
"Only real rates of return of between 8-10%...will drive forward the UK market for renewables from 2010. We have to deliver massive benefits for UK PLC and UK jobs during the next Parliament. This means an increase of at least 10p on the proposed solar PV payments for 2010. Without that, we are not even in the game as far as solar PV is concerned."
Paul Donnelly, spokesman for storage group Big Yellow - the sort of company who could potentially roll out a lot of PV on its warehouses - said the current proposal was simply not interesting enough.
"Solar PV is the most practicable renewable technology for urban environments and is also the most reliable in meeting Planning Authority renewable energy targets.
"But the current return on investment for commercial generators suggested by the proposed PV tariff levels will do nothing to drive investment in this robust, effective technology," he said.
Supermarket group Asda has also made it clear to Department for Energy and Climate Change (DECC) officials that the proposed tariff is too low for the company to bother investing in putting large arrays on its shop or warehouse roofs.
Colin Challen MP, Labour chairman of the Commons All Party Climate Change Group, said the proposed tariff levels would not even deliver the 5-8% return DECC was claiming.
"The Government has literally a once in a lifetime opportunity to get the 2010 starting 'clean energy cashback' payment right for all renewable energy technologies so that the UK can begin to catch up with our European neighbours. But the proposed solar PV payments are simply set far too low to provide for a real kick-start for this technology in the UK and are way below the Government's stated aim of delivering a 5-8% rate of return from the scheme."
For details on the consultation, visit www.wesupportsolar.net.