Friday, 4 November 2011

UK solar industry fuming about DECC FiTS cut!

By Robin Whitlock, Freelance Environmental Journalist

As is widely known by now, the DECC are intending to cut the FiTS rate from 43p per kWh for systems up to 4 kW to 21p per kWh. A similar cut is intended for systems over 4 kW.

The announcement by the Department of Energy and Climate Change (DECC) on Monday of a cut in the rate of Feed-in Tariffs (FiTS) of over 50% to take effect from 12th December this year has incurred the wrath of a UK solar industry concerned about the effect on smaller solar businesses and on jobs. In fact, several reports suggest that solar firms and environmental groups are actively considering taking legal action on this issue. One of the main issues that has infuriated solar businesses and environmentalists alike is the speed with which the government has introduced the cut. They argue that the December 12th deadline pre-empts the consultation and the outcome of the review, not due until next year. At least one legal firm in the UK, Eversheds, argues that the cuts should be administered in a manner that does not affect contracts and orders already in place, as is the case at present. Consequently many across the industry are predicting that the rate cut will effectively ‘kill’ solar PV in the UK as small firms go out of business and jobs are lost.

Some figures in the industry are predicting that as many as 25,000 jobs could go. One firm is facing a 100% cancellation rate among 90% of those clients whose contracts fall on the wrong side of the deadline. Others believe that solar PV could go back to being a status symbol or merely the visible sign of environmental attitudes within particular households, with many deserving schemes such as those aimed at reducing fuel poverty or assisting community projects losing out. This has already started to happen. Dorset County Council have just announced that they are to cancel a £1 million project aimed at installing solar PV on the roofs of local schools. The decision was made on the basis that the project would make a loss of around £60,000 which works out at £2,000 per school.

Emma Hughes from Solar Power Portal approached a number of figures in the industry to gauge opinion on this issue. Predictably they were all woefully similar essentially encompassing the view that the rate cut would kill the industry and that this means that the whole solar PV sector has basically wasted its time. According to Business Green one firm has reputedly been preparing itself for redundancies this week while another solar executive said that he had effectively lost 12 months of his time and £20,000. Another issue though is that of trust. The government has been seen to say one thing and do another, and this is the second occasion on which the ability of solar PV businesses to trust the government has been called into question.

Despite the grim situation, Emma Hughes is optimistic nevertheless. She believes that rent-a-roof schemes will fall flat, but she refuses to believe that the industry will be killed off completely. If anything positive emerges from this it will be that those with strong business models will carry the flag forward to strengthen the industry in the future.

Let’s just hope that this is indeed the case.


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