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Last Updated: Thursday, 17 March, 2005, 22:37 GMT
Solar companies fear grants fall
Solar panel production (Sharp)
The UK sector has grown rapidly since 2002
The UK's solar power industry fears the loss of a very successful grants scheme that subsidises homeowners and others to cover the cost of installations.

Companies that build solar power systems are concerned the 10-year programme, which has already cost 31m, will be wound up early in 2006.

The Renewable Power Association claims this will damage the fledging industry.

The government says its commitment to solar is unchanged but it does want to find more efficient ways to fund it.

Fast growth

The Solar Photovotaics (PV) Demonstration Programme was launched in 2002. According to the following year's Energy White Paper, it was intended to run until 2012 - as Prime Minister Tony Blair acknowledged - to help Britain establish a robust solar industry.

The money has led to a swathe of solar installations on homes and public buildings across the UK and, as a result of increased demand, has cut the retail cost of photovoltaic equipment by an average of 13%.

But the RPA says the Department of Trade and Industry is now running down "phase 1" of the programme and the early growth of the industry could falter as a result.

"It's absolutely staggering to be honest," said Paul Molyneux, the managing director of Sharp UK, which employs around 150 people manufacturing solar panels at its plant in Wrexham.

"There was a clear commitment in the Energy White Paper for a 10-year major development programme. You've got a fledgling industry that's really grown up in the UK - and also installing companies have grown from seven in 2002 to over 50 today.

"Suddenly, we're confronted with funding drying up completely by November 2005," he told BBC News.

'Ripped up plans'

Despite recent PV interest, the UK still lags behind countries such as Germany, which installed a 100 times more solar generating capacity last year than Britain.

In the Whitehall pipeline is a new programme called Low Carbon Buildings - the government says this will provide continued funding for solar as well as wind, energy efficiency and other climate-friendly technologies.

But that programme has not reached the consultation stage and this has left the solar industry facing a potential crisis, claims Seb Berry from Chiltern Future Energy.

"Having planned on the basis of a 10-year PV programme, we are now having to tear up our business plan and think very carefully - about whether we get into other renewable technologies, where frankly the government has also made similar promises and pledges, or whether in fact we focus on other non-renewable-energy-type services and products."

'Value for money'

BBC News asked the DTI to respond to the claims of the RPA and its members. It gave us the following statement:

"The government remains committed to solar power for the long term. We have put 31m of taxpayers' money into this industry since 2002.

"A comprehensive report last year showed that the taxpayer needed to get a better return on our funding for solar PV.

"We are consulting this year on how this can be done. Meanwhile, we announced new funding until March 2006.

"We have reassured the solar industry that we have a long-term commitment to them, and look forward to working with them on the new arrangements."

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