The feed-in tariffs were introduced by the UK Government in April and have been an important tool in generating investment in the UK solar industry as the installation of solar panels and other domestic renewable energy technology increased following the announcement of the feed-in tariffs.
Investors assumed that feed-in tariff levels would be safe until March 2013 due to the fact that the government has indicated that feed-in tariff levels are pre-determined in secondary legislation for all installations that take place prior to 31 March 2013 (and following that date are subject to a review.)
This stability is now under threat due to mounting press speculation (Financial Times: 23.09.10) that as part of the Comprehensive Spending Review to be announced later this month, the Treasury may be force the Department of Energy and Climate Change (DECC) to cut the feed-in tariff.
In response to this, leaders of 64 companies, from tiny start-ups to Dr. Paul Golby, Chief Executive, E.ON-UK and Phil Bentley, Managing Director, British Gas, have written an open letter to Cabinet Ministers Danny Alexander and Vince Cable voicing their concerns: "...premature adjustments to the tariff would have a profoundly damaging effect on long term investor confidence in the clean tech and renewable energy sectors, and may cause investors to flee altogether..."
The initiative was organised by the Micropower Council; Dave Sowden, Chief Executive, commented: "No right-minded investor will trust any of this Government's current or future policies if it meddles with feed-in-tariffs prior to the planned review in 2013. Without confident investors, the Government will find it impossible to deliver the country's CO2 reduction and renewable energy commitments.”