Domestic solar market shrinks by 80 percent following August FiT cut

The solar industry is still coming to terms with the Department of Energy and Climate Change’s new tri-monthly degression model that saw the feed-in tariff tumble from 21p/kWh down to 16p/kWh in August.

Since the introduction of the new lower rate, installations have struggled to climb back to previous levels. Since August 4, there has been an average of 1,090 installations a week. To compare, the average number of installations for the seven weeks prior to August 4 stood at 5,334. That means that the industry has seen the available domestic market shrink by 79.5 percent.

The nature of the tri-monthly degression model means that the solar industry is already bracing itself for a further cut to its headline tariff in less than five weeks, when the FiT rate for <4kWp drops to 15.44p/kWh on November 1.

What is more concerning for solar companies is that the weekly installation rate appears to have settled at around 1,200 installations (4MW) per week. Clearly that kind of market will not be capable of supporting the 4,000 solar companies and 25,000 solar jobs in the UK and is a long way from delivering the oft-repeated ambition of 22GW by 2020, regularly toted by the Minister of State for Energy and Climate Change.

As the cuts continue to bite into the industry the UK solar market is at an important crossroads – companies must find ways of adapting and surviving in the new market landscape. Currently, the large-scale market under the Renewable Obligation scheme provides a flicker of hope for the industry but that too is set to be snubbed out come April 2013, when DECC proposes to cut support to just 1.5ROCs. The upcoming introduction of the Green Deal will provide interesting opportunities for solar installers. However, industry’s trust in Governmental policy has been shaken to its core following a series of traumatising cuts to the feed-in tariff.

Solar companies looking for assistance devising a strategy in order to prosper in the UK solar market can find help at Solar Power UK’s ‘UK State of Play – What’s driving your business’ series of seminars on Tuesday, October 2.  The seminar series will take place in the dedicated PV Hall and will see key industry players such as Ray Noble, Colin McNaught and Finlay Colville outline why the future for solar in the UK is still bright as well as industry best practice.

All MCS-accredited installers can register for the seminar for free using the following code: SPPMCSF3

 

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