Government balls up

When the coalition government took office, naturally we were a bit concerned about where environmental policy might go.

I asked a civil servant what they were thinking. His comment was: ‘They’re just going to throw all the balls in the air and see where they land. They are pretty relaxed about it’.

Well, now the government is in a veritable hailstorm of balls landing in unanticipated places and their sang-froid appears to have been replaced by panic. 

And…which ball is going to land next? Ministers had better get tin hats.

The Feed-in Tariff ball has come plummeting back down to earth – rather more quickly than people involved in the renewable energy market would have liked. We recognise that policies often have to change to take account of economic circumstances, but surely it would have been possible to give the industry more notice.

The decision to cut the PV tariff in half with only a few weeks’ notice has thrown the industry into a tailspin.

Projects are being cancelled and investors are heading for the hills. The cut is justified because the tariff was set too high and installations costs are falling at a rapid rate.

However, the way this has been handled makes the Government look as if it doesn’t understand the process. Its knee jerk approach is undermining much of the good work already done to stimulate the renewables market.

Although the reduced tariff still offers a decent return on investment, it is going to be devilishly hard to entice people back into the market now because they can’t trust the Government to provide clear long term and certain investment criteria. They could well be asking: 'What will happen about the RHI?'