Renewable subsidies make people "lazy"

Renewable subsidies can make people “lazy”, according to the chief of the International Energy Agency. Executive director Maria van der Hoeven today defended the “right” of governments to change the […]

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By Vicky Ellis

Renewable subsidies can make people “lazy”, according to the chief of the International Energy Agency. Executive director Maria van der Hoeven today defended the “right” of governments to change the level of money they give to new technologies like solar power if the running costs come down.

At the launch of a new report called ‘Deploying Renewables 2011: Best and Future Practice’, she told ELN: “Solar PV has seen impressive cost reductions. It’s an important right of governments to benefit from these cost reductions. Subsidies can make people a bit lazy.”

The report looks at the efforts of 56 countries from the OECD and beyond to deploy renewable energy. The IEA suggests that while “retroactive” action on tariffs must be handled carefully, sometimes economic support can “run away with itself”. Some countries spending 50-100% more than a “reasonable” level said Didier Houssin, Director of Energy Markets and Security.

Ms van Der Hoeven suggested that industries needed to capitalise on “the learning curve” when it came to developing technology so that it doesn’t need to rely as much on subsidy.

The IEA chief pointed to Germany which started out with a “high, high subsidy” but cut this once the costs of making solar technology came down. She said: “That’s exactly what we like to see.”

This international view could cause some concern in the UK, where the Government’s proposed cuts to the Feed-in Tariff (FiTs) for solar have sparked protests from lobbyists who claim it could jeopardise thousands of jobs.