UK government’s feed-in tariff cut incurs wrath of solar industry

Credit: SolarCentury

The UK government’s 50% cut to feed-in tariffs (FITs) for domestic solar installations announced yesterday has – unsurprisingly – incurred the wrath of the solar industry.

According to media reports, solar firms and green groups are considering legal action over the proposals.

Apart from the cuts to feed-in tariffs, the main point of contention is the speed with which the changes will be introduced.

According to the Department of Energy and Climate Change’s (DECC) proposals, which are open for consultation until December 23, any projects registered after December 12 would receive the lower tariff from April 1 onwards.

But critics of the proposal argue that the December 12 deadline pre-empts the results of the consultation and the outcome of the review, which is not due until the new year.

According to legal firm Eversheds, changes to the tariff should be dealt with in a way that does not affect orders and contracts already in place.

“The Department of Energy and Climate Change has given developers and investors six weeks to attain accreditation but many projects are operating within delivery timetables (for panels) of eight weeks, thereby removing the ability entirely for them to protect sums already invested,” comments Michelle Davies, partner and head of Eversheds’ clean energy and sustainability group.

She also warns that the cut to solar FITs will kill the industry and deal a potentially hurtful blow to other renewable technologies.

“How certain can developers of other technologies be that they will be treated any differently if there is a perception at some point in the future that they too are receiving too much by way of subsidy?” she asks.

The Micropower Council also warns that the cuts will lead to major job cuts in the sector, which had been a beacon of growth in an otherwise moribund economic picture.

“Within four hours of these proposals being announced, we received our first phone call of a company starting a statutory consultation with staff over impending redundancies,” says chief executive Dave Sowden.

“Cuts to reflect the success of the FIT in reducing the industry’s costs are necessary, expected, and the industry is ready for them,” he admits. “But these proposals go much too far.”

He warns that lower-income families and social housing project will be worst hit, while solar panels will become ‘eco-bling’ for the middle classes.

The same sentiments are being echoed right across the industry and the green sector.

“Surely, the government could have delayed the implementation until spring of next year, giving everyone in the industry time to catch their breath,” says David Hunt, a director with renewable energy company Eco Environments.

For further information:
www.decc.gov.uk
www.decc.gov.uk/en/content/cms/news/pn11_091/pn11_091.aspx
www.eversheds.com
www.micropower.co.uk
www.eco-environments.co.uk

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UK Government slashes feed-in tariffs for solar power (31-Oct)

01 November 2011

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