TL: SOLAR ELECTRIC: THE POLITICAL CHALLENGE: BUILDING A WORLD CLASS BRITISH SOLAR INDUSTRY SO: GREENPEACE UK, (GP) DT: 1997 Summary Whatever the colour of the next UK Government, taking immediate positive action on solar power in Britain, will be a key test of the new Government's determination to act on climate change and to build a green industry in Britain. Greenpeace is challenging all political parties to commit to a minimum programme of solar development for Britain which would result in 50,000 homes being powered by solar electric by 2010. The programme will require £16 million a year of Government finance for the next twelve years. Greenpeace's solar challenge can be financed without increasing Government expenditure. Greenpeace proposes that this expenditure is diverted from existing fossil fuel subsidies. John Gummer claimed recently on BBC television that as part of the UK's policy on climate change the Government 'have stopped subsidising fossil fuel.' Greenpeace has discovered that Mr Gummer's claims are false. In 1995-6 direct subsidisation of the fossil fuel industry, by the Department of Trade and Industry (DTI), cost the UK tax payer some 17.5 million pounds. The creation of a home market for solar electric will catalyse an expansion of Britain's solar industry. The British solar industry has informed the present Government that it is committed to invest a 100 million pounds into new solar factories if Government financial support up to 2010 is guaranteed. This in turn would generate 40,000 new jobs for Britain. It would increase Britain's share of the global market for solar electric from 9% to 15% by 2010. This would result in annual sales of 750 million pounds for the British solar industry. Over the course of its lifetime Greenpeace's solar programme would avoid the release of some 1.26 million tonnes of CO2 and avoid the generation of some 1.8 billion units of electricity. INTRODUCTION The British solar industry currently has an annual turn over of some 40 million pounds. It commands 9% of the 450 million pounds a year global solar electric market.(1) Despite the British solar industry's relatively good standing, Government failure to develop a home market in the UK is currently restricting its opportunities for expansion. Other countries, notably Japan, are rapidly developing home markets for their own solar industries. This is enabling their industries to grow, to reduce the costs of the technology, and to capture a growing share of the expanding world market. CLIMATE CHANGE AND THE SOLAR IMPERATIVE Whatever the colour of the next UK Government, taking immediate positive action on solar power in Britain, will be a key test of the new Government's determination to act on climate change and to build a green industry in Britain. John Major in a recent letter to Greenpeace confirmed that 'the threat of climate change is one of the greatest challenges that we face'. (2) John Gummer, the Secretary of State for the Environment speaking recently on BBC Radio 4 confirmed that our climate is already changing: "Our climate is changing. Within twenty-five years Southern England will be yellow rather than green because we'll grow sunflowers and maize in a way which we've never grown before. We'll see the climates moving northwards so that the 'garden of England' will be much closer to Yorkshire than it is to Kent but, in the Northern climes, in Scotland for example, there will be quite a number of species of plants and animals which will no longer be able to live."(3) Solar Electric (solar photovoltaics) can be easily installed on Britain's millions of homes and offices. It converts sunlight directly into electricity without emitting carbon dioxide. At present the Government is failing to create a home market for Britain's solar industry. On the 14th February Greenpeace challenged John Gummer on the Government's failure to take action on solar power in Britain. Greenpeace installed twenty four solar electric panels on the new headquarters of the Department of the Environment. In response John Gummer stated that the Government would shortly announce measures to stimulate greater use of solar energy.(4) However, to date, no specific details have been released by either the Department of the Environment (DoE) or the Department of Trade and Industry (DTI). GOVERNMENT HYPOCRISY ON CLIMATE CHANGE John Gummer claimed recently on BBC television that as part of the UK's policy on climate change the Government had stopped subsidising fossil fuels: 'For example, we have stopped subsidising fossil fuel. Now, that was a tremendously tough thing to do. ......We have made that huge change at enormous political damage to ourselves because we believed it was right.' (5) Greenpeace has discovered that Mr Gummer's claims are false. The Government is continuing to subsidise the fossil fuel industry through the DTI's Energy Research and Development Budget. In 1995-6 the DTI spent some £17.5 million on research into oil, coal and gas. The planned spend for three financial years 1996-7 to 1988-1999 is £41.6 million( 6) According to the International Energy Agency (IEA) between 1984 and 1995 the Government has spent some £260 million from its energy research and development budget supporting fossil fuels. This averages out at some £21.5 million pounds a year. (7) Greenpeace is challenging the next UK Government to discontinue this present subsidy of the fossil fuel industry and to redirect it to provide the Government finance for Greenpeace's proposal for a minimum programme on solar in the UK. SOLAR ELECTRIC: PAST, PRESENT AND FUTURE COSTS The current costs of solar electric means that if it is installed on a home in the UK, it will generate electricity at about 3-4 times the present cost of purchasing conventional electricity.(8) The costs of solar electric panels have dropped five fold over the last fifteen years and are predicted to drop a further three fold by the year 2000.(9) These further cost reductions are primarily dependent upon increasing manufacturing which is dependent upon the level of growth of the global market. In order to increase manufacturing, and reduce costs further, a number of countries (Japan, USA, Netherlands, Germany) have embarked upon, or are planning, large-scale development programmes which will result in tens of thousands of homes being powered by solar electric panels by the beginning of the new millennium. SOLAR ELECTRIC IN BRITAIN - A TALE OF GOVERNMENT INACTION The current Government is failing to stimulate a market for solar power in Britain today. Only two grid-connected solar homes are currently operational. At present the Department of Trade and Industry (DTI) is currently allocating only £0.9 million a year to the expansion of solar electric technology in the UK. The potential for solar electric in the UK is vast. Studies by the DTI have shown that a wholesale application of the technology could generate around two-thirds of the nation's electricity requirements.(10) The DTI's own research concluded that: 'It has been shown in this study that photovoltaics deployed as cladding on the UK building stock could make a substantial contribution to the electricity supply capacity of this country.'(11) Furthermore, another report written for the present Government warned of the risk of not taking action on developing a market for solar in the UK: 'The UK PV industry is at risk of losing out to European competitors in the grid-connected system market at home and abroad. At least a modest, coherent national programme is required to give the industry the credibility of a national interest.' (12) SOLAR ELECTRIC IN JAPAN: A TALE OF GOVERNMENT ACTION The Japanese Government, who are hosting key climate negotiations in Kyoto at the end of this year, are undertaking the world's largest ever deployment of solar power. The programme plans to install solar electric on some 70,000 homes by the year 2000.(13) Last year the Japanese solar home programme was oversubscribed five fold due to the vast level of interest being expressed by the Japanese public and some 1,500 homes were solarised. In 1996 the Japanese Government allocated £90 million to the programme.(14) The Japanese industry is expanding rapidly as a direct result of the 'guaranteed market' offered by the 70,000 homes programme. Last year sales of Japanese technology increased by 21% with Kyocera, the largest Japanese manufacturer, increasing their sales by 50%.(15) There are no published figures on how many jobs this solar expansion will create in Japan, but it is clear that government support, combined with the certainty of a future market, is providing the security that Japanese manufacturers require to justify the expansion of manufacturing. For example Sanyo are investing £63 million over the next three years and Sharp spent £50 million in the last financial year. GREENPEACE'S SOLAR CHALLENGE Greenpeace is challenging all the political parties to commit to a minimum solar programme for Britain which will result in 50,000 solar homes by 2010. This solar programme can be delivered without increasing Government expenditure or raising the price of electricity. Greenpeace proposes that the tax payers money currently spent directly subsidising the fossil fuel industry is used to finance this solar programme. Government investment of £16 million a year for the next twelve and a half years would result in the installation of 50,000 solar home systems. Government finance would provide capital grants to cover 40% of the costs of a 2kW solar system (some £4,000). The recipients of the solar electric systems would contribute the remainder (some £6,000). Recipients of solar electric systems would include individuals, house builders, local authorities and housing associations. A 2kW solar electric system installed on an average sized house would generate some 1,500 units of electricity per year; around fifty per cent of the annual electricity requirements of an average home. Over the course of its lifetime the programme would avoid the release of some 1.26 million tonnes of CO2 and avoid the generation of some 1.8 billion units of electricity. (16) Such a solar programme would transform the status of the British solar industry. The British solar industry have stated that if the Government committed to investing around £18 million a year up to 2010 they will invest £100 million into new manufacturing capacity. This in turn would result in new solar factories and, according to the British solar industry, create some 40,000 new British jobs. It would also increase British industry's share of the global market for solar electric from 9% to 15% and would generate annual sales of £750 million. (17) If a newly elected Government acted on Greenpeace's challenge then all these environmental and economic benefits can be obtained without increasing Government expenditure or raising the price of electricity. Furthermore, Britain's solar industry would be transformed into a truly world class industry. REFERENCES 1. Photovoltaics: A growth Industry for Britain, The British Photovoltaic Association, Feb 1997 2. John Major, Letter to Greenpeace, 26th September, 1996 3. John Gummer, Tuesday 18th February BBC Radio 4 M.T.S. Transcript - Ref No.: 4736 4. Financial Times: 19.2.97 5. John Gummer. (M.T.S. Transcript - Ref No.: 4734 BBC-1 Television "On the Record" Sunday 16th February 1997) 6. Trade and Industry 1996. The Government's expenditure plans 1996-7 to 1998-99. DTI. HMSO. 7. International Energy Agency: Energy Policies of IEA Countries. 1996 Review. OECD. 8. Greenpeace, Building Homes with Solar Power, 1996 9. Photovoltaics: A Market Overview, 1993. James and James UK. Government Photovoltaic Budgets & Programmes, Strategies Unlimited, 1996 10. Department of Trade and Industry (1992). The Potential Generating Capacity of PV-Clad Buildings in the UK, ETSU S 1365-P1 11. Department of Trade and Industry (1992). The Potential Generating Capacity of PV-Clad Buildings in the UK, ETSU S 1365-P1 12. Grid Connection of photovoltaic systems. ETSU S 1394-P1 DTI Report 1993. 13. Government Photovoltaic Budgets & Programmes, Strategies Unlimited, 1996 14. Government Photovoltaic Budgets & Programmes, Strategies Unlimited, 1996 15. PV News, February 1997 Volume 16 Number 2. 16. HGa Consulting Engineers, Private Communication, 20th February, 1997. 17. Photovoltaics: A growth Industry for Britain, The British Photovoltaic Association, Feb 1997. -------------------------------------------------------------- Appendix 1: DETAILS OF DIRECT FOSSIL FUELS SUBSIDY 1995-6 by DTI Source: Trade and Industry 1996. The Government's expenditure plans 1996-7 to 1998-99. DTI. HMSO. Expenditure on Fossil Fuels Clean coal: £7.0 million Oil and gas production technology: £3.0 million Offshore geology: £1.7 million Reservoir simulation: £2.0 million Improved oil recovery: £2.8 million Industrial promotion: £1.0 million Total 1995-6: £17.5 million Planned spend for three years 1996-7 to 1988-1999: £41.6 million 1996-1997: £15.5 million 1997-1998: £12.8 million 1998-1999: £13.3 million