‘Leave microgeneration subsidies alone, or green investors will flee, warn over 60 captains of industry'
Leading Chief Executives have warned the Government not to cut subsidies for household low carbon energy systems, stating that "investors may flee" the sector.
This follows mounting press speculation in recent weeks, that as part of the Comprehensive Spending Review, the Treasury might force DECC to cut the "feed-in-tariff" paid to producers of low carbon electricity ahead of a planned review of tariff levels due in 2013. In an open letter to Cabinet Ministers Danny Alexander and Vince Cable (attached), the Chief Executives of 64 companies from tiny start-ups to two of the UK's largest utilities say:
"...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..."
They warn that any early cuts in tariff levels would be an "unprecedented and confidence shattering intervention" which would put their "ability to attract future investment...in mortal peril"
The initiative was organised by the Micropower Council. Chief Executive, Dave Sowden, 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.
"Customers are already responding to this speculation by cancelling orders ‘in case the feed-in-tariff gets scrapped'. Thousands of jobs and hundreds of millions of pounds of investment are now hanging by a thread. It is therefore vital that the Government squash this speculation without delay by confirming it will honour the current feed-in-tariffs."
Media Enquiries: Jane Vaus, Head of Media and External Affairs firstname.lastname@example.org 077480 10447
Notes to editors:
1) The Feed-in-tariff was introduced in April 2010 and entitles anyone producing low carbon electricity from appropriately certified installations to receive a fixed price from their electricity supplier for each unit of electricity they produce, plus a small top-up price for any of this they export to the grid (as opposed to using themselves). The price a customer receives is fixed for the lifetime of the installation, up to 25 years, depending on the technology used. The tariffs increase each year in line with inflation, and for householders, any payments made under the scheme are exempt from income tax.
2) The tariff levels are pre-determined in secondary legislation for all installations that take place prior to 31 March 2013. From April 2013 onwards, the previous Government provided indicative tariffs for new installations in subsequent years, but these levels were always subject to a review and new secondary legislation prior to their implementation.
3) Investors had therefore assumed that tariff levels would be safe until March 2013, and, in choosing to invest, were already taking account of some element of regulatory risk for the likely tariff levels that would apply from April 2013 onwards, but not prior to this date.
4) According to Ofgem-sourced data, around 10,000 installations have now registered and are eligible to received feed-in-tariff payments under the scheme.
5) Full details of the Feed-in-tariff policy including a full list of technologies and tariffs is available on the DECC website - http://ow.ly/2LLLN; further information is available from Ofgem - http://ow.ly/2LM9J
6) The Micropower Council exists to promote the interests of the microgeneration industry. It comprises leading companies, trade associations, professional institutions, NGOs and others. It is the only UK body representing the full range of microgeneration technologies. More details are available at www.micropower.co.uk