Thursday, 7 June 2012

DECC predicts stability in solar market over next 3-years
By Robin Whitlock

An announcement recently made by the Department of Energy and Climate Change (DECC) recently predicted that the UK solar market will remain stable for at least the next three years, despite the commotion caused by the recent range of government cuts and the forthcoming subsidy cut from 21p per kWh to 16p, due to take effect from August. 

Feed-in Tariffs (FiTS) were never intended to be an everlasting subsidy or to generate profits for speculators, however the new round of subsidy reductions has been introduced with particular modifications to the process which should bring a measure of stability back to the market and therefore we should also see a return in consumer confidence. There are two particular measures which are intended to encourage stability, which are:
  • A multi-installation tariff for organizations installing more than 25 systems consisting of 90% of the standard tariff (increased from 80%)
  • An increase in the export tariff, for installations with an eligibility date on or after August 1st, from 3.2p per kWh to 4.5p
The life of the tariff will also be reduced from 25 to 20 years for those systems with an eligibility date on or after August 1st and tariffs for installations that do not meet the energy efficiency requirement will be set at the same rate as stand-alone systems. DECC have also detailed the manner in which the tariff will be reduced over the next three years, a decrease of 3.5% every 3 months commencing on October 1st 2012. Over the course of a year the subsidy will therefore be reduced by around 2.24p, much better than the 27.3p reduction experienced by the industry since December 2011. 

“There have been a lot of gloomy headlines about solar power but the fact is the returns on offer are far better than anything you can get in the bank” said Carl Bennett, the Managing Director of Trade Skills 4U. “The smart money is on solar PV. And by investing in solar power not only do householders protect themselves from rocketing electricity bills; they help local businesses and employment. Our business has enjoyed growth as result of our investment in solar. Last year we built a first storey training roof, which is the only one of its kind in the UK, in order to train solar installers and in the environment they will be working in when they qualify. Our dedication to ‘real life’ scenario training as seen a steady rise in business and helped to drive us forward in the recession when many have cut back. Now that government have announced future stability for the Feed-in-Tariff, we can only predict a steady and stable future for solar which is of course great news for everyone.”

Martin Gebbett, Director of DPS Renewable Technologies, had this to say: “The announcement by the DECC signals an end to the uncertainty that has prevailed in the PV solar industry since September 2011. We believe the new set guidelines allow us to plan move clearly for the future and drive our business forward. We have seen a noticeable increase in enquiries over the last few weeks and see a positive outlook.”

Environmental groups such as Greenpeace have long been urging people to invest in solar. The reason why they are so much in favour is because solar is a truly sustainable technology which can play a real part in helping to reduce climate change. However solar can also offer attractive rates of returns to investors and so is of interest to consumers as well. 

Since the introduction of the Feed-in Tariff in April 2010 there have been over a quarter of a million installations across the country with the solar industry employing at least 25,000 people with the potential for further growth, even in the face of one of the worst recessions the country has experienced since the end of the Second World War. Both the government and the industry expect to see 22 GW of solar installed by 2020 benefitting both the economy and the environment. 



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