For the solar industry to thrive and become subsidy free in the next five years the Government must remove barriers to growth.
1. Stop the Solar Tax Hike
The proposed changes to the business rates for companies that self-supply themselves with solar power, risks devastating the commercial rooftop sector. The changes, which only affect companies that own panels and use the power on-site, not systems that are mainly for export, will see rates increase six to eight fold. If these changes go ahead then many companies and public sector buildings will see retrospective changes to their tax burden, which could make systems no longer financially viable. To meet their Paris Agreement obligations the Government should be using the tax system to reward clean energy investments, not make them non-profitable; they must drop these proposed changes.
2. Create a level playing field in taxation for solar energy and fossil fuels
The Solar Trade Association is calling for the extension of 100% Enhanced Capital Allowances (ECAs) to commercial rooftop solar power through the Energy Technology List (ETL). Unlike solar power, shale gas and North Sea oil operations qualify for 100% capital allowances so development capital expenditure qualifies for immediate relief. Relief is also available for decommissioning oil infrastructure after production. Currently solar only qualifies for Capital Allowances at 8%, less than general plant and machinery at 20%. The tax system must be realigned to reward clean energy investments, not polluters. The STA recommends Enhanced Capital Allowances of 100% in the first year for solar power. Currently Ireland offers solar 100% first year Capital Allowances, while Kenya is offering Accelerated Capital Allowances of 150% (with a 10 years limit). Solar thermal is currently eligible for 100% Enhanced Capital Allowances, and ECAs were extended to Energy-from-Waste plant in the last Budget. It is difficult to see why they should not be reinstated at 100% for solar power.
3. Provide clarity on Renewable Heat Incentive (RHI) funding
The UK is falling far short of its domestic targets on renewable heat. Despite this the consultation on RHI early this year proposed removing solar thermal from the scheme; somewhat paradoxically because it is too popular. The industry is still waiting for the results from this consultation, due by the end of this year, and the insecurity has caused solar thermal deployment to collapse. Solar thermal has the lowest maintenance costs of all the RHI options, and is the only one with no emissions. This means it is perfect for fuel poor houses, and those in dense urban areas with air quality issues. The Government should keep solar thermal within the RHI and expand its uses to include industrial and space heating.
4. Carbon Floor Price (CFP)
The Carbon Floor Price, the levy paid by electricity generating companies upon the emission of CO2, is up for review. The CFP has been an important driver in moving away from high-polluting coal power plants, which lead to solar producing more power than coal for the first time in Q3 this year. When reviewing this policy the Government must keep in mind domestic and international commitments to decarbonising UK energy production.
5. New Pot 1 Contract for Difference (CfD) round
As well as decarbonising the energy system, the Government should look for value for money. Keeping the cheapest renewable energy sources out of the CfD auction rounds will slow down the Government’s progress towards reaching emissions targets, while simultaneously keeping consumer bills unnecessarily high. Established technologies such as solar (in “Pot 1”) have the potential to provide power far cheaper than either the less established technologies (Pot 2) and other negotiated and non-competitive contracts but do not currently have the ability to compete in auction rounds to deliver this cheap, clean power.
6. Reform Feed in Tariffs (FiTs)
The Feed-in Tariff scheme as amended at the start of 2016 could be significantly improved with only minor tweaks. In some FiT bands the deployment caps are too low, constraining meaningful markets, in other FiT bands the tariffs themselves are too low to stimulate investment. This distorts and limits the industry, constraining its potential to drive down costs in the future. The STA have produced a report detailing the changes we would like to see to the system that would require only £6 million additional resourcing spread out across the entire parliament, and would stimulate investment of around £500 million.
7. As strong voice for energy and climate change issues within BEIS
With the creation of the new Business, Energy, and Industrial Strategy department, from the merger of the Energy and Climate Change and Business, Innovation, and Skills department, it is essential that energy and climate change issues do not get drowned out. The STA will be looking to the Autumn Statement for signs that the Government are still committed to tackling climate change, and that transitioning to a low-carbon energy supply is still a priority
8. Clarity on the Levy Control Framework from 2020 onwards
The Autumn Statement may include some kind of announcement on the Levy Control Framework green energy budget post 2020. The current budget caps only run to 2020/21. This is absolutely essential so that solar investors can plan ahead – 2020 is only 5 years away. Clarity on this is essential, and the LCF needs to become more transparent so that stakeholders can understand how the budget is being spent and how spend is forecasted.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
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