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oh dear: Government cuts home green scheme funding

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    oh dear: Government cuts home green scheme funding

    Government cuts home green scheme funding
    Ashley Seager and Fiona Walsh
    Wednesday May 9, 2007
    Guardian Unlimited

    The government drew sharp criticism from the country's fledgling renewables industry today as it relaunched a controversial grant system but slashed the funds available for some technologies.

    Systems such as solar photovoltaics and small wind turbines, both of which generate electricity, will now be uneconomic for households to consider, even though the government has pledged a massive increase in the use of renewables over the coming decade, experts said.

    Having suspended its grant system, called the low carbon buildings programme (LCBP) on budget day in March (AtW's comment: so they only launched it couple of months ago and already run into troubles - shows the degree of preparation...), the Department of Trade and Industry said today it would restart it at the end of May.

    Key changes are the abolition of monthly allocations of funds, which had embarrassed the DTI by running out after half an hour on the first day of each month, a shortening of grant claim periods and huge reductions in grant money available for solar PV and wind turbines.

    The maximum grant per household is now set at £2,500 whereas it had been £15,000. For wind systems it is halved to £2,500.

    As a result, the annual return on Solar PV systems in terms of electricity saved will drop to 2% or less, rendering it unattractive. Grants for solar water heating, at £400, or ground source heat pumps, at £1,200 remain in place but the conditions on claiming them have been tightened.

    Trade and industry secretary Alistair Darling said: "Micro-wind turbines and solar panels are fast becoming the credible response of householders to cutting their carbon emissions as well as their utility bills.

    "The microgeneration industry has tremendous potential in the low carbon economy. Products are already available on the high street and are starting to become recognisable on our sky lines. This grant scheme is designed to maximise carbon savings, demonstrate potential and help the sector become more commercially competitive in the long term."

    But representatives of the renewables industry were unimpressed. "If I had to think of a way to destroy the renewables industry, even my worst case scenario would not have been as bad as this," said Rajiv Bhatia, head of Alternergy, a leading renewable energy distributor.

    The LCBP was launched a year ago with £12.5m of funding for households, although £50m is available for renewable installation on public buildings. Gordon Brown added £6m in the budget although his simultaneous raising of air passenger duty will bring the government an additional £1bn a year.

    Philip Wolfe, head of the Renewable Energy Association, said that while the reintroduction of the scheme was good news, the scale back "makes a nonsense of the extra funds from the chancellor and of the government's ambition to bring on-site power to the people".

    He added: "We hope that renewable heating from biomass, solar thermal and heat pumps can now get back on track, but this decision will place renewable electricity beyond the reach of all but the wealthiest households."

    He said it would particularly hit solar photovoltaic and wind technology, which have been two of the most popular elements of the programme. Demand has "collapsed" since grants were suspended in March and is unlikely to recover, he said. Small renewables companies have already had to lay off workers.

    "Putting such a low maximum cap on solar electric and wind is ludicrous," said Howard Johns of Southernsolar. "The harm inflicted on the industry over the last six months will be compounded by this decision, resulting in more redundancies and bankruptcies."

    Since it launched in April 2006 the LCBP has directly funded 2,175 installations on homes. This includes 242 mini-turbines, 313 Solar PV projects and 1467 solar thermal heating systems. To put that in perspective, though, Germany has 300,000 PV systems on homes.

    Germany supports microgeneration by forcing electricity companies to pay a lot for any power fed into the grid by households on the principle that the polluter pays. The DTI, though, says that method is to "interventionist" in the UK's deregulated energy market.

    Dr Hermann Scheer, head of Eurosolar renewables association, told MPs in Westminster that the German system had been a success and the industry now employed 214,000 and had created 24,000 new jobs last year alone.

    Britain currently generates 2% of its power from renewables but has pledged to raise this an EU target of 20% by 2020.


    3 months into running and they run out of money, one would have imagined they would claim great success and put more money in, but nooo there is no way Gordon loses the money he robbed off others

    "If I had to think of a way to destroy the renewables industry, even my worst case scenario would not have been as bad as this," said Rajiv Bhatia, head of Alternergy, a leading renewable energy distributor.

    Today we've also had the latest on Tax Credits.

    I hope someone is keeping a list of this government's initiatives, and what happens to them! Should be a funny, bumper read!


      Personally I don't have a problem with them limiting the amount that each person can have.

      It helps to stop contractors charging inflated prices because HMG is paying.



        Prices are high because of lack of economies of scale - R&D costs are pretty much fixed, so if sales are low then prices will be high - grants in theory should allow break through this chicken-egg situation and they did, however the tw@t Gordon does not want to actually put money he robbed off people into stuff like this, no Sirs.