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Solar industry welcomes DECC review of FiT cuts, but calls for certainty

Green policy news – by GreenWise staff
17th May 2012
The UK solar industry has today welcomed the announcement by Energy Secretary Ed Davey that he may move the start date back for the next set of cuts to the Feed-in Tariff for solar electricity, but said the sector needed "certainty".
Davey told MPs in the House of Commons today that the Department of Energy and Climate Change (DECC) was looking at a potential "tweak" to the FiT regime for solar. The remarks followed Energy Minister Greg Barker, who wrote on Twitter yesterday that DECC was "looking at scope for pushing back a little the next proposed reduction in the solar tariffs" due in July.

"It is very encouraging for the future that Government is listening to industry concerns, but we need certainty as soon as possible on the details of when and what the next tariff adjustments will be," Paul Barwell, chief executive of the Solar Trade Association (STA), said.

Earlier today, Howard Johns of the Cut Don't Kill Campaign, also warned of any "cosmetic" freeze to the cuts. "After the policy shambles of the past six months, the solar industry needs adequate time to get back on its feet," he said.

And Robert Goss, managing director of Conergy UK, added: "The postponement will give property owners and developers another chance to take advantage of continuing high tariffs, but as an industry, what we need is certainty. The uncertainty created by the Government is the only reason for recent dampened demand, because good returns are still available."

The Government is currently consulting on cuts to the FiT rate for solar electricity installations of four kilowatt in size and below from 21 pence per kilowatt hour, from July 1. This could see the rate drop between 13.6 pence and 16.5 pence. The proposed cuts would follow cuts in March, which saw the FiT rate slashed from 43.3 pence to 21 pence per kilowatt hour.

Installations stalled
Figures for total capacity over the past four weeks show just 17 megawatts (MW) of solar was installed compared to a four-weekly average of 71 MW over the past year – a 75 per cent fall in business.

Earlier this month, hundreds of solar firm bosses wrote to Prime Minister David Cameron asking him to halt plans by Energy Ministers to cut the FiT for solar in July or risk killing of the solar industry for good.

Yesterday, the Solar Trade Association (STA) lent its weight to the calls, saying that latest figures for solar electricity installations confirmed the industry had "stalled".

The STA is keen to get the message out that solar still offers good rates of return for those who install it . It believes consumer confidence and the double dip recession is adding to the woes of the solar industry.

"There are two great reasons for homeowners to invest in PV today: the costs of solar power have fallen through the floor and our energy bills are going through the roof," said Barwell.

A DECC spokesperson this morning said: "We are reviewing the date for the next reduction in solar tariffs and will be making a fuller announcement shortly."

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