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DTI Puts Renewable Electricity Beyond the Reach of Householders
Submitted: 9 May 2007
The Department of Trade and Industry (DTI) has today slashed support for homeowners investing in renewable electricity, despite getting extra cash in last month’s budget.
The Chancellor increased funding by 50% to almost £19m, but DTI now intends to cut the maximum grant offered to householders from £15,000 to £2,500.

The move, part of a re-launched Low Carbon Buildings Programme, will increase the cost to the customer of an average solar photovoltaic (PV) system by over 60% and is expected to further undermine growth in the PV, micro-wind and small hydro sectors.

Philip Wolfe, Chief Executive of the Renewable Energy Association, commented:
“While it is good news that the Programme will be back up and running, this 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. 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.

“This will particularly hit PV and wind, which have been two of the most popular elements of the Programme. Demand has collapsed following the DTI’s decision to suspend the Programme in March, and with these unnecessary funding cuts it is unlikely to recover. At such short notice, job losses and company failures will inevitably follow; losing vital experience at precisely the time we need strong growth in the expertise base.

“Only last month the Chancellor responded to the early success of the programme with the decision to increase funds to £19m, so that it could carry on for another 15 months. With just £3m spent to date, the real risk is not that funds will run out, but that millions will be left in the bank while household carbon emissions continue to rise.

“Our members can’t comprehend why the DTI responds to a 50% funding increase by drastically reducing grant levels. Less than two months ago the UK committed to a European target to achieve 20% of our energy from renewable sources by 2020. Instead, today’s decision gives the impression that the DTI is dangerously out of step with the Government’s visionary low carbon policy agenda. If we want a thriving and efficient UK renewables sector it needs strong and stable incentives, instead of this chaotic situation that is strangling it at birth.”


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