Feed-in tariff campaign boosts UK solar power

One of our biggest and brightest campaign wins has to be the UK's solar power success story.
  26 Sep 2017    |      10 min

Friends of the Earth has boosted green energy in homes and businesses around the country - part of our work to beat climate change.

In 2010, we persuaded the government to pass a new law to ensure people got a decent payment for tackling climate change by generating their own renewable electricity. The payment – known as the Feed-in Tariff (FIT) – gave the solar industry the support it needed to grow and created thousands of jobs.

When the Treasury later tried to make unlawful and crippling cuts to the scheme, our supporters, local groups and lawyers came to the rescue.

UK energy law: how did we improve it?

The concept was simple: reward people, communities and businesses for installing renewable technologies like solar panels, wind and water turbines – and turn our buildings, farms and rivers into clean power stations. How? By changing the Energy Bill then passing through parliament (now the Energy Act 2010).

At the time, in 2008, the UK was near the bottom of the European renewable energy league table. Other countries were putting us to shame. Germany was generating 200 times more solar power than the UK. The Germans were world leaders in clean energy. Why? Because they were driving demand by paying households and businesses for the green power they generated.

Working with the Renewable Energy Association we pulled together a huge coalition to back the campaign – from the Coop Bank to the National Farmers Union. And with our supporters and renewable energy champion Alan Simpson MP, we urged parliament to vote for changes to the Energy Bill.

The changes we wanted would guarantee people – installing a green energy system in their home, business or community building – a premium price for the electricity or heat they generated.

And the cost of creating a new UK industry, employing thousands of workers, while reducing climate-changing emissions? Just a few quid a year extra on people's energy bills. Amazing value – especially when you consider the amount the taxpayer loses on subsidising fossil fuels like oil.

Singer Lilly Allen, along with Europe's first solar-powered music studio, got fully behind our campaign. As did Razorlight's Johnny Borrell who recorded Funeral Blues at that very same solar studio in support of our climate campaign, The Big Ask.

Having worked at The Premises solar-powered recording studio I have experienced how clean and green renewable energy is. I fully support giving people a renewable energy reward for the power they generate. It's good to be green! Singer, Lilly Allen

The Premises – whose solar studio has also been used by artists such as the Klaxons, Hot Chip, and Bloc Party – sent an e-mail to all MPs, with a message from Lily Allen, asking for a renewable energy tariff to be included in the Energy Bill.

Without such a tariff, energy companies had shown little interest in buying electricity from people with small-scale renewable energy installations. And when they did, they only paid a very low price. This held back the uptake of renewable technologies like rooftop solar because it was impossible to recoup the cost of the panels over their lifetime – meaning only people who didn't care about financial return were buying them.

However much they might wish to be green, for many businesses it is simply not financially viable to install renewable energy. If the UK followed the example of Germany and introduced a premium Feed-in Tariff, the initial costs of installing renewable technologies such as our solar panels would be re-couped in a much shorter time, and after that turn a profit. This would be a huge incentive.

Julia Craik, Director of Europe's first solar-powered music studio, April 2008

We won. The government introduced the legislation we had been demanding and MPs overwhelmingly voted for it. The improved Bill entered into law as the Energy Act 2010. For the first time, this meant that renewable energy could be owned by anyone – not just big companies.

Immediately homeowners, businesses, community groups, schools and councils all wanted in on the deal, forcing the sector to grow. As a result prices dropped, and by 2015 the cost of solar panels in the UK had more than halved. The outcome was amazing, especially for solar power: quickly leading to hundreds of thousands of installations – and thousands of new jobs.

What is the FIT scheme?

The Feed-in Tariff (FIT) is a payment from energy companies to anyone generating their own electricity from renewable sources such as solar photovoltaic (solar PV) or wind. It launched in April 2010 thanks to a successful campaign by Friends of the Earth and our supporters.

The electricity you generate and use yourself is free, and you also get paid for every unit that you don’t use but export back into the grid.

Generators get:

  • Free electricity – the electricity you generate and use is free, saving you money on your energy bills.
  • A generation tariff – your electricity supplier pays for every unit (kWh) of electricity you generate. Tariffs vary depending on the size and type of system.
  • An export tariff – you also get paid around 5p for every unit you don’t use but export back to the national grid.

Once you’ve signed up, FIT payments are guaranteed for 20 years. It’s tax free and because it’s index linked it won’t be reduced by inflation.

What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is similar to the FIT. But it rewards people producing clean green heat from renewable technologies like solar thermal or biomass boilers. The RHI has 2 schemes: domestic and non-domestic.

When our old oil boiler conked out, I got in an energy consultant to advise on how best to reduce the carbon footprint of our home. He crunched some numbers, reminded us about draught proofing and insulation, etc, then said a pellet boiler would slash our emissions by 60%. I was hooked.

Dominic Murphy, Friends of the Earth Editor

How did FIT increase community energy?

The Feed-in Tariff guaranteed long-term premium payments for renewable energy. It meant that people could pay back the costs of their renewable installations within a decade and then go on to make a profit.

Some people rented out their roofs to investors who installed solar panels to receive the FIT. It meant they got free energy during the day in return for their roof space. Consumer generation and the UK solar industry started to boom.

Local authorities and housing charities realised they could take social housing tenants out of fuel poverty by having about 30% of their electricity bills coming from their own roofs – and having an income stream that would pay for energy improvements to the properties themselves.

In Germany the FIT led to more than half of its massive renewable energy capacity being owned by individuals, families, towns, farms or other collectives of people bundling their money together.

The government's illegal FIT cuts – and how we stopped them

The Feed-in Tariff was much more popular that the government had envisaged. In 2012 it tried to close most of the scheme because the money it allocated – albeit an arbitrary budget – had nearly run out.

This put around 25,000 jobs in Britain’s new solar industry at risk, and risked undermining all of the progress that had been made.

Solar panels were getting cheaper to produce and install. But instead of reducing the Feed-in Tariff in line with these falling costs, the government threw the industry into chaos by proposing deep and sudden cuts. Solar projects were immediately put on ice as people worried that the new FIT payments wouldn't be enough to pay back the cost of the panels.

The government was acting unlawfully. It was planning to dramatically cut the rate it had promised – and do so without giving fair notice.

We worked with the newly-grown solar industry to stop the government by taking it to court. Not once. Not twice. But 3 times. Victory was sealed in the Supreme Court when the government lost its final appeal.

But we also provided a way forward. We got the government to agree to a new policy that would allow solar to grow but bring the level of support down as the cost of solar panels fell. And we secured an extra £1 billion for the solar industry so that the scheme could continue.

What has the Feed-in Tariff done for UK renewable energy?

In 2010, a mere 7% of UK electricity came from renewables. Fast forward to 2016, and clean energy sources were generating 25% of our electricity.

The FIT – along with other schemes designed to encourage larger renewables – has played an important part. And in particular has been a great success story for solar power in the UK. There are more than 700,000 people in Britain with solar panels on their roofs. Creating an industry which brings in millions of pounds of taxes and helps us to meet our climate change targets.

But government policy in the UK is still holding back solar.

In 2015 the government again announced that it was planning to slash the FIT scheme by nearly 90%. Once more Friends of the Earth launched an emergency campaign, teaming up with charities and businesses to fight back. Thousands of our supporters took action. We were able to get the government to reduce the scale of its cuts, buying the solar industry a lifeline.

While these cuts have likely cost more than 15,000 people their jobs  in the solar industry, it is still surviving. In the meantime, solar gets cheaper and more popular every day. New technologies like batteries and electric vehicles continue to improve the economics of solar power. Meanwhile other renewables – like offshore wind – are reducing in cost far more quickly than most people expected.

Support renewables and help us stop fracking

The Paris Climate Agreement aims to limit global warming to 1.5°C. The UK has to do its bit. Around 75% of our electricity must come from clean energy sources by 2030.

But the government is hellbent on new ways to dig up fossil fuels like oil and gas. It's forcing fracking on to communities who don't want it.