Solar slump: the power of negative press

The call for solar panels has significantly reduced in the UK since Government announced feed-in tariff cuts. That’s a fact. While at one time installers’ phones were ringing off the hook while they worked seven-day weeks, now, just a few months later many are struggling to fill their days. Industry has come up with several reasons for this dip in demand, yet the most frequent culprit appears to be negative press.

Mainstream publications have the luxury of reaching out to thousands of UK consumers on a daily basis. Almost everyone of the age to pay energy bills now has access to news of some description and many take what they read at face value. Unfortunately, most of the journalists reporting for these newspapers are not specialists in the field they are writing about and, in some cases, they get things wrong. This is a recurring problem for the solar industry.

Cuts will kill

However, while we are quick to blame these news sources, they are not entirely at fault – most of what they write they hear somewhere else. This was certainly the case back in October 2011 when Government revealed plans to cut the feed-in tariff by more than 50 percent – down from 43.3p/kWh for a 4kW system down to 21p. Several members of the UK solar industry were vocally opposed to the changes, so much so that almost every newspaper picked up on it.

If only the positive angles would spread as far and wide…

At the time the mainstream press was printing scaremongering headlines which prompted consumers to believe that as soon as the cuts went through there would be no point in installing solar. This was only made worse when Government threatened to bring the cuts forward to December instead of the originally-planned April deadline.

In fact, many consumers I speak to are totally unaware of the real reason behind the cuts (which I will go into later on); they simply saw what was printed: the incentive to go green was being pulled. For them, that was that. There was a small window of opportunity to install and they had missed it.

Government mistrust

This brings me to my next point, which is that consumers no longer trust Government’s decisions. The mainstream press (and the coalition itself) has done a very good job of convincing the UK that Government is reluctant to support renewable energy – especially solar power. People don’t read about how successful this technology has been; in fact even industry’s fantastic installation achievements were spun as mad rushes to beat impending deadlines. Instead people heard about how solar ‘subsidies’ will add to their energy bills and that the technology is really a ‘nice-to-have’ for the rich or environmentally insane.

You have missed the boat

Speaking of deadlines, it is fair to say that much of the negative news coverage from the past months focussed on installing now, today, without delay. Panic-stricken consumers, who may once have been considering installing solar panels, were now greeted by headlines stating that “thousands [had been] caught out by deadline,” that the “solar industry [was in a] scramble” and that the “sun is setting on solar industry.” These inaccuracies were made worse by printed atrocities such as “homeowners who fitted solar panels will soon be left out of pocket” and “under the cut –which will see the tariff reduced from 43.3p per kilowatt hour to 21p –it will take homeowners about 18 years to break even on the cost of installing panels, compared with the current ten.” These unfortunate lines were brought to you by our friends at the Daily Mail.

This reporting is not just inaccurate, it is downright misleading.

In a bid to find out just how much of an impact these stories were having on the real world I started a discussion on this topic on LinkedIn and found that among UK solar installers the general consensus is that consumers believe they have “missed the boat”. Whether it was the papers’ intention to do this (although I surmise that it wasn’t) they have done a darned good job of scaring away the once burgeoning customer base.

The invasion of the cowboys

Those who were left interested, mainly those who had done their research and found that despite the feed-in tariff cuts solar was still a viable technology, were still wary. During their fact-finding mission these more savvy UK consumers had come across articles on the so-called solar cowboys.

So, if the cuts, deadlines, boat-missing and general concern surrounding solar wasn’t enough the industry now had to deal with customers peering at them through mistrusting eyes.

This was another element jumped on by the national press, who were quick to spread the word that there were rogue traders about, but not so quick to point out that these were in the minority. I recall a 30-minute BBC news feature focusing on one elderly man who had been ripped off by a shady solar installation company. Instead of demonstrating the dos and don’ts when choosing an installer in order to educate the consumer the programme tarred every solar company with the same brush, causing countless problems for the hundreds of reliable installers trying to make an honest living.

Again, this was the result of a lack of market knowledge.

Sales and mortgage misfortunes

This brings us to the most recent of the negative and somewhat inaccurate coverage the UK solar industry has been subjected to: that solar will prevent you from selling or remortgaging your home. I covered this news back in early May after the Royal Institute of Chartered Surveyors (RICS) issued warnings that people could face problems when selling their home, or worse, be refused a mortgage as a result of the ‘free’ panels.

After looking into this topic and speaking with several of the free solar providers I found that actually, out of hundreds of customers, there was only one reported case of a mortgage being refused due to the solar panels – and there wasn’t any strict evidence to prove that it was definitely the technology holding them back.

Nevertheless, many of the mainstream news portals picked up on this news and before long, people were beginning to mistrust rent-a-roof companies, worried that they would struggle to sell or remortgage their home when the time came to do so. This again was very damaging to the industry and reduced the amount of interested consumers dramatically.

The real reason behind the cuts

So I’ve looked into all of the negative messages being pumped out about the UK solar industry as to why the cuts happened, but what was the real reason behind this drastic change? Well, quite simply, it was to level out the return on investment.

Since the original 43.3p feed-in tariff rate was introduced the cost of solar components has more than halved – hence the cut to 21p in April this year. After that the prices continued to fall meaning the ROI was still too high and therefore Government imposed further cuts, which are to go ahead from August 1. These have all been calculated and will depend largely on how much solar is installed. I have gone over why solar is still a fantastic investment in great detail in my latest blog, so I won’t go over everything again. The point is: the consumer is getting the wrong message and it is up to us, together, to make sure they get the right one.