Inconsistency in government communication is damaging confidence in the renewable sector. That’s the message from leading UK solar investor Foresight Group who this week will deliver a letter to Energy and Climate Change ministers outlining its concerns for the future of the UK solar industry.
The letter is in response to the recent review of the solar feed in tariff (FiT) scheme - introduced by the previous Labour government less than a year ago - which will be announced in a government consultation paper next month (March 2011). Foresight claims any amendments to the scheme could have potentially damaging implications both economically and environmentally for the UK economy, and believes that the industry needs confident and positive government action to encourage investment and long term returns. The letter specifically refers to the Coalition Government’s stated objective to leave a legacy of green investment and build community renewable energy solutions for future generations.
Jamie Richards, a partner with Foresight Group and who leads its solar activities explains: "Foresight’s exposure to solar regulatory regimes across Europe provides a good basis for engaging with DECC on the best action to ensure a rational set of proposals for the March consultation paper. In particular we are urging the government to rule out any proposals which impact on projects where significant capital commitments have already been made, otherwise the sector will see this as a retrospective measure and we know that the government wants to avoid this."
Foresight has specialised in solar investments in Spain, Italy and now the UK for a number of years and as a result has considerable experience of the complex regulatory issues that affect the industry. In the UK specifically, it is focusing on three different solar sub-sectors: residential rooftop, industrial rooftop and ground mounted solar installations in order to develop a flexible and balanced strategy of investments for its investors. As a result, Foresight’s Solar VCT, which was launched in Autumn 2010 as the first of its kind in the UK, expects to see no impact on either its deployment timescale or return profile if the government indeed goes ahead and makes changes to ground mounted FiTs.
As Jamie Richards explains: "We have ensured that there is enough deal flow in each of the three main solar sub-sectors to cover monies raised within the VCT, and without impacting the return profile. That said we are confident that we can engage with the government to address the current uncertainty that is impacting investor confidence in the wider UK renewables sector.”
For more information please contact Mike Currie, Partner at Foresight on 01732 471 816.