Feed-In Tariffs review affects landowners

Last week, the owner of the Lanhydrock Estate Company in Cornwall expected to sign a £12 million contract to develop a solar farm, a mile-stone event in the county’s reinvention as a pioneering hub of renewable energy. Instead, Andrew Williams travelled to London, hoping to doorstep energy minister Greg Barker in a bid to save his project and discover what possessed Whitehall to grind the renewables movement to an overnight halt.

The fast-tracked review of Feed-In Tariffs (FITs) announced by Chris Huhne, the Energy Secretary, on February 7 sounds harmless enough on paper, but it has had the effect of throwing thousands of small farmers and landowners-who have put upwards of £50,000 each upfront into renewable projects-into limbo. They include Mr Williams’s near neighbour, the explorer Robin Hanbury-Tenison, who stands to lose £150,000 on a small-scale mixed scheme.

Banks are now backing off from loans, and legal firm Eversheds is representing 30 solar farms seeking redress from the Department of Energy and Climate Change (DECC). Mr Williams, the managing director of renewable-energy company Cornwall Power Ltd, accuses the Government of ‘undermining confidence in UK plc’ and sabotaging its own ability to meet targets under the Kyoto agreement.

It all started when the previous Government introduced incentives to increase the level of renewables towards the UK’s legally binding target of 15% of total energy by 2020. FITs, which cover installations up to 5MW, is the everyman scheme: it dictates what energy companies must pay suppliers and is fixed (although index-linked) for a set period-usually 20-25 years.

However, although the schemes undervalued anaerobic digestion (see box), the tariffs for wind turbines and photo-voltaics (solar) in particular were generous-the latter upwards of 29.3p per kw/hr. FITs triggered so much outside investment in solar farms that Mr Barker says ‘hot money’ has drained the pot and must be deferred, fast-tracking the first review scheduled for April 2012 by a year. But the tactic has backfired, causing uncertainty to the intended beneficiaries-small farmers and house-holders-as well as countryside-based entrepreneurs who saw renewables as a way of boosting the rural economy. Most schemes are only at the planning-permission stage, so have no chance of being operational before the FITs are reduced, making mincemeat of everyone’s business plans.

Recommended videos for you

‘The Minister has been scared by reports of a photo-voltaic “gold rush”, especially in the South-West, but he doesn’t understand the tactics or pace of business,’ explains Jonathan Scurlock, the NFU’s chief renewable-energy advisor. ‘Cornwall has 24 applications, of which eight have got through planning so far. Some will always be held back by the pace of grid connection and finance. Even if someone scrambles to get set up before the tariffs are reduced, it only takes a grumpy engineer not arriving to wire you to the grid for the deadline to be missed. This is not the way to build a low-carbon economy.’

Mr Williams had small-scale renewables on his Lanhydrock estate before the incentives were introduced. ‘Suddenly, 22 developers bombarded me with requests to rent land. But none of them mentioned what was in it for Cornwall, so I decided to do it myself.’ In addition to his own solar farm, which has cost £500,000 thus far, Mr Williams has committed up to £900,000 to community renewable projects, advised Defra and worked closely with South West Water and Cornwall Council-which has taken extra staff, formulated a planning policy in the absence of a national one and backed other landmark schemes, such as at Newquay airport.

Nationally, solar-farm proposals are at various stages in the onerous funding and planning-permission process throughout Kent, the Midlands and Pembrokeshire. Natural England has explored combining solar with agri-environmental schemes, and the National Trust has looked at powering listed buildings from discreet ground-mounted panels. DECC seems especially wary of 100 or so proposed 5MW schemes-each equivalent to 30 acres of ground-mounted panels.

Dr Scurlock says most barn-mounted projects fall into the 200kw-300kw category; the biggest already operational is Michael Eavis’s £550,000 investment at Worthy Farm, home of Glastonbury Festival, which covers 16,000sq ft and provides enough electricity for 40 homes. James Vaccaro, managing director of investment banking and renewables for Triodos Bank, is waiting for confirmation that the review includes brownfield and rooftop solar installations before making a decision. ‘If it does, everyone will be out.’

Mr Williams says: ‘It’s disingenuous of the Minister to say he didn’t understand the scope of 5MW schemes. He backed FITs in Opposition, even saying they didn’t go far enough. He’s had four opportunities to have a go at it since then why stop it, just as we’re all about to press the button?’ Mr Hanbury-Tenison adds: ‘A review is good in 2012, but halfway down the road? Banks and investors have run for cover! All this worry about overseas investment is baloney. I am just one of many small farmers trying to do what we thought was the right thing.’

John Mortimer, CLA South-West director, comments: ‘To renege on this will destroy confidence through out the landowning and business sectors. If the Government is serious about renewable energy, it will need to accept larger-scale solar parks-sticking solar panels on a few roofs here and there isn’t going to scratch the surface.’ A DECC spokesman explains: ‘We’re not against solar farms; they can reduce carbon emissions and contribute to our renewable-energy target. What we don’t want is for large-scale solar installations to be claiming money meant for householders, small businesses and communities.’