Following weeks of speculation, the Department of Energy and Climate Change (DECC) has today launched a full consultation on changes to the solar PV feed in tariffs. Solar Direct Savings (SDS) a leading solar panel installation company says plans to reduce the current Feed in Tariff (FIT) by 50% will halt the solar revolution in its tracks.
Dave Langford from SDS said: “This is a real kick in the teeth for consumers, for the industry and for the UK’s green energy targets.
The government proposes that the new generation tariff or FIT for solar PV installations with a total installed capacity of 4kW or less will be reduced from 43.3p per KWp to 21p per KWp.
It is proposing that the new tariff will apply to all installations from 1 April 2012. Anyone who has the system installed and certified between December 12 and 1 April will enjoy the higher rate for around fifteen weeks before the reduction kicks in and those people who move fast and have the system installed and certified before December 12 will continue to be eligible for the 43.3p rate.
“The FIT has in many ways become a victim of its own success,” said Dave Langford, “with over 90,000 installations since last April and a 900% growth in the country’s solar power potential since subsidies were introduced.
“In addition, a huge industry has grown up around solar PV which is creating thousands of jobs at a time when most business sectors are in decline. In the past 12 months alone the number of people working in the industry has jumped from 3,000 to 26,000
“This decision therefore, goes against many of the government’s own environmental and job creation policies.”
Britain is aiming to get 15% of its energy consumption from renewable sources by 2020 and so in April 2010 the Government introduced the current subsidies to encourage people to start generating electricity – mainly from the sun and wind. Most domestic renewable energy installations have come from solar PV panels – described by many as the solar gold rush.
Some households can make around £1,200 per year from the energy they produce from their panels – and they also see a reduction in their electricity bills. In order to quality for these benefits households have to invest around £10,000 for the solar panels.
SDS say that pensions will bear the brunt of the cuts.
“The majority of our customers are retired,” said Dave. “Many assumed the capital they had saved all their working life would pay enough interest to supplement their pension. Of course this has not been the case and so they have decided to use the capital to buy solar so that the income from the FIT would provide that much needed income. Now it looks like this avenue for income generation has been closed to them.”
The solar industry is now mounting a campaign to halt the proposed cuts and there is mounting speculation that solar firms may seek a judicial review if the government attempts to fast track changes to the tariffs in a way that does not give installers time to prepare.
“The key message for consumers is to move fast,” said Dave Langford. “They still have time to have their system installed before the new deadline and take advantage of the current rate – which is guaranteed for 25 years.”
SDS has published a guide to the new proposals on its website www.solardirectsavings.co.uk