Member News
4th November 2011
John Andrews, chief executive of the National Association of Professional Inspectors and Testers, raises concerns about the eligibility date of the government's review into feed-in-tariffs.
What are NAPIT's initial thoughts on the consultation into feed-in tariffs (FITs) launched by the minister for climate change on October 31st?
NAPIT thinks that periodic reviews of both the FIT process and the rates of payment are entirely right and proper, but the announcement of this review with the inclusion of a 12th December 'eligibility date', has caused widespread panic and confusion, both within the industry and far beyond into the investment community.
The inclusion of this date (12th Dec 2011), was both unhelpful and commercially naïve and it has only served to enhance the already widely held suspicion about the government's commitment to small-scale renewable technology amongst the both UK-based and international investors.
Given the UK's position as 'the most generous provider of FITs in Europe', it is widely expected that cuts to the scheme will be inevitable. What measures has NAPIT taken in preparing for the review?
NAPIT has been in discussions with the department of energy and climate change (DECC) and the wider sector interest groups for some time about the FIT model, and data collection amongst our members to determine the structure and levels of FITs going forward, has to reflect the reality of product prices. What we all need is a vibrant and sustainable industry, avoiding short-term fixes and boom-and-bust scenarios.
The FIT model cannot be a vehicle for printing money, but at the same time it must ensure a reasonable rate of return to encourage investment both from within and outside the sector.
How will NAPIT be advising its members on their response to the minister's statement?
Our advice to members is to get involved in the DECC FIT review consultation and also to protest as vigorously as possible about the effect which the announcement of the 12th December eligibility date has had upon the industry, effectively stalling it for a period of around two months.
If DECC intended this as a way of halting spend, it is an incredibly commercially naïve way of going about it, by potentially destroying an industry.
Even though finances are tight, we refuse to accept that there were not other pots of money available to underpin the industry and the PV FIT program.
It is essential that the pain caused to the industry by this announcement is eased somewhat after the consultation by a well-presented, long-term, responsible and credible programme going forward to help in some way to restore confidence in the political support for small-scale renewable technologies.
For what reasons does NAPIT believe the government is moving swiftly to introduce its new measures to the FIT scheme?
As we have already stated, NAPIT has no issue with the review; it is inevitable and indeed necessary, given the fact that because of the success of the scheme, the number of new companies that have been set up, and the very large number of high-skilled jobs that have been created, virtually all the funds that had previously been allocated have been used up for this year and even bitten heavily into the funds for next year.
But the answer is not to cut a hugely successful industry off completely (which is the effect of the 12th December date), but to modify the FIT rates and scheme model to reflect the reality of the fall in product prices and if necessary, find further funds to make up the shortfall in this year's allowance, maybe by diverting funds from the hugely unpopular and unpredictable Large Scale Wind Turbine sector.
Does NAPIT envisage playing an important role in the consultation process?
NAPIT supports probably 95 per cent of the efforts of both DECC and the wider government initiatives, we just differ on a few fundamentals.
Our support is targeted at ensuring that any system of government financial support aims to provide help to the greatest number of households and businesses and creates the greatest number of highly skilled jobs.
Supporting small-scale renewable technologies does just that; allowing benefits to all, including the fuel-poor, whereas support for technologies like On-Shore Large Scale Wind Turbines, does not; it is just effectively a way of transferring money from the poor, including the fuel-poor, to the rich.
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