Would the solar industry be better off without government support

The UK’s only Green MP, Caroline Lucas, takes to the pages of The Guardian to launch a broadside against the UK Government’s investment policy in relation to solar energy.

The UK Government this week lost an appeal in the High Court against a lower court’s ruling that its retrospective attempt to change the solar feed-in tariff rates imposed by the previous Labour Government was “legally flawed”. The Cameron Government had tried to reduce the rates before the agreed consultation period had expired.

The court’s decision is considered to be a victory for the UK solar industry however the Department of Energy and Climate Change (Decc) is threatening to take the case to the Supreme Court. The future of solar investment therefore remains in an unhealthy limbo.

Intriguingly the Hon. Ms Lucas touches on a theme returned to often in these pages: certainty.

Ms Lucas argues that if government’s are going to retrospectively change policy at each election, why should the solar industry believe them and invest in the country at all? Sounds familiar?

“The central question is this: if policy can be changed retrospectively, why should business believe that the UK is a safe place to invest?” she asks adding  that many solar PV installers and solar companies were now completely unsure of where they stood in relation to the investment process.

We have seen the “boom and bust” cycle so often happen here in Australia. Solar companies, taking advantage of federal and state government supportive programs — such as a generous feed-in tariff for solar panel consumers — crank up investment in expectation that government support will continue.

On many occasions this is turned upside down when a newly-elected government takes aim at renewable energy subsidy schemes as the prime target for their “cost cutting” measures.

As in the UK, where then is the certainty, or level playing field, needed for investment in renewables in Australia?

Is our solar industry better off without government subsidies? Would renewable energy companies in the solar sector be better off ignoring government subsidies and support which could be yanked at the drop of a hat (or an election)?


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