Solar PV needs more PR power in light of subsidy cuts
As governments across Europe slash subsidies for small-medium scale renewable energy generators, the industry needs to rethink its approach to communications strategy if solar PV is to continue to shine.
When the UK Government introduced its Feed-In-Tariffs (FiTs) in April 2010, solar photovoltaic (PV) quickly became an attractive investment. Having seen the success of similar schemes in Germany, UK PV companies were quick to switch from targeting a small group of enthusiastic environmentalists with their PR and marketing campaigns, to a much wider audience of ethically-minded investors.
Indeed, with the generous FiTs on offer, investing in solar PV was seen as a ‘no-brainer’ – a message propagated throughout the mainstream media. For example, the Guardian’s Miles Brignall wrote: “If the government offered to pay you £1,000 a year for the next 25 years, in return for an up-front investment of £12,500, you'd snap it up in a second. Well, that's pretty much the deal on offer this week... through the new Feed-in Tariffs.”
However, it is now just over two years since the launch of the scheme and the UK Government has had to slash its FiTs several times in response to the unprecedented level of take up. In February this year, it was reported that adoption was five times the level originally anticipated, with Gregory Barker, the UK minister for energy and climate change proclaiming that “never again should we have a fixed price tariff that allows a bubble to grow and offer unduly large rewards.”
The latest cut, effective August 1st 2012, takes the new rate for solar PV installations of <4 kilowatt hours (kWh) capacity down to16p/kWh from 21p/kWh. Moreover, the tariff lifetime for solar PV will be reduced from 25 to 20 years for all new installations.
FiTs drop across Europe
The UK picture for FiTs with regards to solar PV is not isolated. Austerity measures are being introduced by governments throughout the Eurozone and the fact many have also under-estimated the level of take up of PV, as a result of unduly high FiTs, has seen a swathe of subsidy cuts taking place across the Continent.
Germany has by far been the most successful adopter of PV with its FiT scheme, with the country now boasting a cumulative installed capacity of 24.7 gigawatts (GW) – the largest in the world. Despite the fact Germany now reduces the rate of its FiT tariff every six months, the rate of PV adoption has remained high because falling production prices have meant that the level of up-front investment required has also fallen significantly. The resulting over capacity has led to further legislation being proposed, which will limit new FiT-supported installations to a maximum 1 GW per year and accelerate the frequency of subsidy cuts to a monthly basis. In addition, subsidies for some types of renewable energy facilities will be phased out completely by 2017.
A little further south, the Spanish Government passed a decree in February 2012 to temporarily suspend subsidies for all new wind, solar, co-generation or waste incineration plants, for which it has received applications for a total of 500 megawatts of new capacity. The measure is expected to save the Government at least €160 million this year alone.
Meanwhile, the Greek Government has openly admitted that it cannot afford to maintain its renewable energy subsidies at their current rates. The FiT for PV was recently slashed by 12.5 per cent to €292.08 per MWh and the Government now plans to lower the tariff every six months.
It’s not just solar PV that is struggling to provide the same return on investment, as other renewable energy sources are also seeing cuts in subsidies. In the UK, the Government made an unexpected cut to its FiT for small-scale wind (<1.5 kW capacity), from 35.8p to 21.0p, at the same time reducing the tariffs for <1.5 to <15 kW capacity and >15-<100 Kw to 21.0 p – from 28.0p and 25.4p respectively. These reductions come into effect from October 2012.
The result of these cuts has sparked a media backlash, with some predicting the end of solar PV. The reality, however, is that some solar PV technologies and other renewable energy systems can still provide a respectable ROI without the support of subsidies, which is why industry players urgently need to re-examine their communications and marketing strategies.
The bigger picture
Up until recently, PR and marketing campaigns have focused on the financial returns provided by small-medium scale solar technology and have done an exceptional job in raising the profile of renewables in the media. However, with the Government’s original objective of using FiTs to boost adoption arguably achieved, marketers must now explore other angles.
One solution is for companies to better communicate the role that solar PV will play in the future energy mix. With aggressive targets to cut carbon emissions by over 80 per cent by 2050, the EU’s Energy Roadmap is heavily reliant on decarbonising the power sector. Such a target can only be achieved with a substantial increase in renewable resources and the level of installed small-medium scale solar will be vital in achieving the EU target of renewables being 75 per cent of gross energy consumed by 2050.
It’s also important for marketers and PR agencies to promote the fact that ROI for solar PV installations is achievable outside of subsidies. With the prices of silicone plummeting from a high of $475 in 2008 to a low of $24.27 per kilogram in April 2012, the outright investment cost for solar PV is shrinking, making the payback period without subsidies significantly shorter and thus the overall business case much more attractive. In addition, small-mid scale solar contributes to grid management by acting as a source of distributed generation – a strong proof point for the industry.
Emerging from the shadows
Having achieved so much in just a few years, it is essential that the small-medium scale solar PV industry takes action now to ensure it emerges from the long shadow cast by the recent subsidy cuts and negative press.
Equipped with two compelling, yet lesser known messages, there are three important steps solar PV firms should be taking from a PR and marketing perspective to broaden and refresh their campaigns:
- Review existing strategies: If your PR and marketing efforts are still focused on the benefits of FiTs, it’s time to change – and time is of the essence. By recognising the types of challenges being faced both externally and within your organisation and brainstorming ideas as a group, you should be able to identify several angles on which to base new campaigns. Bringing in external assistance at this stage could also be helpful, giving a fresh perspective and ensuring you can quickly establish a new strategy and provide a rapid response to news and events as they break.
- Key in to future trends: Campaigns take time to plan and implement, so the ability to spot potential future trends is invaluable from a PR and marketing perspective. Government news agendas can be a particularly valuable source. For example, when launching a consultation on Government strategy for decarbonising heating in March this year, the UK’s Energy and Climate Change Secretary Edward Davey spoke of the need to cut emissions from the way we generate heat and said that many communities are already switching to solar thermal. It would therefore be fairly safe to surmise more Government support for activity in this space and position the benefits of your product portfolio accordingly.
- Become famous for your thinking: The GW of installed capacity across Europe nearly doubled in 2011 and the solar PV market is becoming crowded. This means more players will be vying for media airtime, with many talking about the key issues – e.g. investment security, skills shortages, and the effects of EU and individual government policies. If you can delve into these a little further, find a fresh angle and communicate your thoughts clearly and concisely through multiple channels, you stand a much better change of obtaining a thought-leadership position.
Image: Solar Power Plant via Shutterstock
 Media reference to solar jumped up by 10,000+ from 1st January 2009 to 31st December 2011 – based on Google News data
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