Green Math Part 6: Reality bites the UK

In Britain, solar firms that believed the government’s promise of endless and generous green energy subsidies are learning a hard lesson.

Feed-In Tariff (FiT) rates for solar projects are being slashed by half:

Hundreds of solar companies were likely to go bust by Christmas, it was claimed, after Greg Barker, the minister for climate change, said “feed-in tariff” subsidies were too generous and would be halved.

One solar businessman sees no future at all in a world without subsidies:

Daniel Green, the chief executive of Home Sun, a solar company, claimed that the Prime Minister had given him two personal assurances of his support for the solar industry. “They have effectively bankrupted thousands of companies,” he said. “Most of them will be gone before Christmas.

“We built a business on the back of David Cameron’s promises. He has betrayed us twice. Anybody thinking of investing in government-sponsored green opportunities, I would advise them to run away. All my business will stop with immediate effect if this goes through. It’s an extremely black day.”

Estimates are that up to 25,000 jobs will be lost as a result of the change to FiT rates. That’s not good news for any economy, but the big picture is that many more jobs may be saved by slashing green subsidies.  British consumers and businesses are suffering as energy costs soar, with real worries about the number of seniors in fuel poverty this winter and major industries threatening to quit the country altogether.

If lower FiT rates can be converted into lower overall energy costs, it’s a good move for the country. The UK has admitted the cost of green energy is too high, just as Spain and Germany already learned. Britain lowered FiT rates for wind back in March.

shattered dreams

In Ontario, even the merest threat of a cut to the FiT programs was enough to force a solar firm to cut shifts. Canadian solar (and wind) firms that based their business models on FiT rates up to 20 times the spot rate for a KWh should be very nervous about the news coming out of Britain today.

The sad fact is that everyone except green energy zealots and politicians in their thrall saw this coming.

Greens say we need sustainable energy, but solar and wind are not the answer. The wind may blow for free and the sun may shine for free, but current technology to capture and convert those resources into energy needs public money at an unsustainable rate. It’s inconvenient, but it’s the truth.


7 thoughts on “Green Math Part 6: Reality bites the UK”

  1. And that is why Britain is spending more than 5 billion pounds to lay 11 undersea cables under the channel for electrical hookup to nuclear plants in france. Ahhh….the irony

  2. “Feed-In Tariff (FiT) rates for solar projects are being slashed by half.” Why only half? Perhaps the rest will be cut after Christmas, while the country is under a foot of snow and stories of pensioners freezing to death are in the headlines. Barker (and Osborne) will be declared heroes for riding to the rescue of the freezing masses. What are the odds for a snap, spring election?

  3. You mentioned Ontario,Canada, so I’m going to give my two cents worth, or perhaps I should say, ‘one cent worth’ as that is all I have left.Ontario used to have one of the best utilities in the world providing cheap and relatively green power(Hydro and Candu). We used coal primarily to fill the gap and provide dispatchable power when it was needed. Our current government (I blame the cities for voting the undemocratic, nutbar, Fiberals in again) has made huge incentives for solar and wind that have not only divided the rural countryside by pitting neighbour against neighbour, it has raised electricity prices so high that the industry we did lose from the recession are unlikely to come back. The Fibs claim they have made the province green by closing coal plants, without mentioning the mass production of gas plants that have replaced them and are offsetting wind and solar when they don’t produce. This is an even extra expense from so called ‘green energy’ that a gullible public is swallowing. Refitting our existing coal plants with scrubbers would have been a greener choice and would save the apparent abundance of fracked natural gas for the next generations to heat their homes. Using it up now for electricity is stupid when coal is available. How will your children like the ‘octupus’ in the basement 100 years from now to heat from coal(and getting up at 4AM to fill the hopper to keep the girls happy) when natural gas should be used for this purpose. Sincerely, F. Winterburn

  4. @ Fred C Winterburn

    Well put. We have relatives in Ontario and Hydro One has taken so much disposible money out of their budget that they are now forced to go to food banks and are worried about losing their house. They were heartbroken when McGuinty won the election and are looking to moving to Alberta.

  5. It sucks for the people that are about to lose their job. But if you invest in programs that need political support, you better make sure that those politicians are in your pocket, or you’re going to get undone by either the general public, or someone who does have the politicians paid for.

    But it’s great for all those other people whose job might now come into existence because money will end up back in consumer pockets.

    1. brc – agreed. I don’t enjoy that workers lose their jobs any time, but according to the Spansih study, each green job cost 2.2 jobs in the rest of the economy. So the UK’s solar subsidy slash is likely to be a net gain for employment.

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