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Guest post by: Paul Sherrington Become an Author

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Under the scheme, households, community groups, and businesses are paid generous amounts though Feed in Tariffs to produce electricity by a Renewable Energy technology such as Solar PV. As a result, the number of Solar PV installations since April 2010, has risen dramatically - resulting in approximately 11Megawatts of installed capacity from over 5000 installations.

Finally, a Success story . . .!

So, given the very obvious success of the scheme, the Labour Government could perhaps claim the title of the best ‘Solar Government' to date, if not necessarily the greenest Government.

For any Government with ambitions to become the Greenest Government, Solar PV installations increasing throughout the UK in large numbers should be a good starting point.

So how about the new coalition Government? Will they establish their status as a good Solar Government by continuing the Clean Energy Cashback Scheme? Will they even build on this and introduce the promised Renewable Heat Incentive for technologies such as Solar Thermal that generate hot water?

. . . or is it?

Sadly, within months of taking office, the solar industry is already concerned that for the coalition Government, the Clean Energy Cashback Scheme may not be the way forward. The Renewable Heat Incentive is also rumoured to be on the (G-rated!) back-burner.

But is the solar industry over-reacting? After all, when the Clean Energy Cashback Scheme was consulted upon during the last Government's time in office, it received cross-party support.

It was also widely recognised that the technology most likely to benefit was going to be PV Solar. Government doubts now that the level of payments made through the scheme is overly generous would appear to be strange at best given their previous support.

Fuss over nothing?

This crisis in confidence originated from remarks made by Charles Hendry MP, Energy Minister, that the Feed in Tariff rates may be too ‘generous', and are being looked at as part of the Comprehensive Spending Review.

So how seriously should we take this ‘threat'? Given the poor record of UK Government in supporting the renewable energy industry (compared to countries such as Germany) and considering UK policy has been inconsistent and woefully inadequate at best (or consistently anti-renewable at worst) the industry is right to mount its campaign of defence.

However, the coalition Government has already backtracked on their pre-election promise to extend entitlement to the scheme to early adopters of renewable technologies. Any hope of establishing themselves as the Greenest Government would be shot to pieces if they undermine the Clean Energy Cashback Scheme by reducing the Feed in Tariff levels to such an extent the return on investment ceases to be attractive.

The Clean Energy Cashback Scheme has many things going for it:

a) It is working - installations are in line with expectations

b) It does not cost the Government anything - always a plus point!

c) It obviously and visually supports their GREEN credentials

In all likelihood, it is hard to believe the Coalition Government would undermine a policy that hits all these buttons.

Equally, or of even more significance, is the fact that hundreds of small electrical companies, and many big companies such as British Gas, Eaga, M&S and Tesco, have invested millions of pounds on the basis that the current Feed in Tariff rates will not be reviewed until 2013.

For the future of Renewable Energy, and, in particular, the current market in PV Solar, Government policy needs to be long term. The industry believed this had been achieved when formulating the Clean Energy Cashback Scheme. So they were right to believe that was the case, and a few ill conceived and badly timed words from a Government Minister shouldn't change that.

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