While almost everyone in the UK solar industry is disappointed with Government’s decision to review feed-in tariff rates, the less well-off may have more reason than most to feel thwarted. Greg Barker argues that the proposed cuts will help the general public to benefit from solar power, yet the reluctance shown by UK banks to fund solar investments means that only the ‘well-off’ can capitalise from the FiT incentive.
According to Climate Change Minister, Greg Barker the reason for reviewing the feed-in tariff policy was to allow the population at large to benefit from, and engage with, renewable power generation. Yet industry experts disagree, saying the refusal of banks to finance solar investments, thanks to the uncertainty caused by the threatened cuts, means that it is almost impossible for those who cannot afford the upfront costs to install solar panels.
“For most homeowners they are unable to benefit from the 8 to 10% that the FiT guarantees to domestic generators because they don’t have the £12,000 or £15,000 they need to install the photovoltaic panels in the first place,” said Lee Summers, Director of Alumet Renewable Technology and EOS Energy.
“Banks do not regard the Government’s 25 year index-linked, commitment as collateral for a loan. It is totally unfair that only the most ‘well-off’ individuals in a community can benefit from solar technology. The feed-in-tariffs are paid for by levies on every energy bill and so every home owner should have the opportunity to access the FiT,” he said.
Of course, there remains the option to take advantage of ‘rent a roof’ schemes, which work by allowing a solar panel installer to effectively lease a resident’s roof for a period of 25 years so the homeowner benefits from the free energy generated. The downside of this is that it is the company, not the customer, who benefits from the feed-in tariff payments.
Despite the refusal of banks to finance solar installations the number of domestic solar installations in the UK is significantly higher than before the introduction of the feed-in tariff in April 2010. To date 31,434 installations, amounting to more than 86MW have been recorded by Ofgem. Of these, 30,802 were domestic, totalling over 81MW.
“It would not be difficult for Government to instruct the statesubsidized banks to recognise its own feed-in-tariff scheme as suitable collateral,” concludedSummers.
