Solar threatened by speed of FIT changes

11th November 2011


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Thousands of jobs put at risk by plans to halve feed-in tariff (FIT) support, warn industry experts

Organisations from across the renewable-energy sector have condemned the depth of the suggested cuts to the FIT for small-scale solar installations and proposals to impose them on projects completed months ahead of their introduction on 1 April 2012.

While the sector anticipated a reduction in FITs to reflect the 30% fall in costs since the scheme’s launch, the proposal to cut payments to the smallest photovoltaic installations by more than 50% and to impose the new rates on projects installed as of 12 December came as a shock.

Howard Johns, chair of the Solar Trade Association, said: “We want a sustainable cut that will allow us to survive and deliver green growth… The government has a choice – either it can cut like this and make an entire industry go bust, or it can work with us to properly plan the phasing-out of the tariff.”

Dr Mark Everard, visiting research fellow at the University of the West of England, installed solar panels on his home in 2010 and agrees the government’s plans could stop others doing the same.

“Anything that extended the payback period would have made the decision much more marginal,” he said. “Halving the biggest benefit of installing solar panels will inevitably suppress demand, just at the point where the technology is beginning to take off.”

Meanwhile, David Sowden, chief executive of the Micropower Council, criticised the government for effectively giving developers and homeowners just weeks to install panels in order to benefit from the original tariffs.

“The speed of the changes,” he said, “will leave many companies with stranded assets, a plethora of contractual disputes in the industry and another race to beat the six-week deadline.”

Energy minister Greg Barker defended the government’s proposals to impose the new tariffs early, however, saying it was the only way to ensure the scheme did not exceed its budget.

“Were we to announce a change now and leave the current arrangements in place until next April, there would be a massive gold rush, and the entire budget for feed-in tariffs – the entire £867 million – would be gone by then,” he said.

However, with DECC’s consultation outlining the proposals not closing until 23 December (lexisurl.com/iema11158) a number of solar industry organisations are considering taking legal action against the government.

Jeremy Leggett, chair of PV installer Solarcentury, said: “There is no question that a ‘consultation’ with an end date of 23 December slashing tariffs from 12 December is wide open to legal challenge and we now expect a very serious industry challenge to be mounted.”

The proposed changes to the FIT scheme follow the launch of long-awaited consultations from DECC and the devolved governments outlining future subsidy levels under the Renewables Obligation.

“Much of the [DECC] package is good, although it is hugely complex,” commented Paul Thompson, head of policy at the Renewable Energy Association. “Additional support for wave and tidal [energy] is welcome, but some other technologies seem to have got a bit of a raw deal.”

DECC has also confirmed that the delayed Renewable Heat Incentive will be launched by the end of November. The initiative was finally given approval by the European Commission after DECC cut the tariffs for large biomass installations from 2.7p to just 1p per kWH.

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