Shortly after the proposed feed-in tariffs were announced the Department of Energy and Climate Change (DECC) published its Impact Assessment (IA) which outlines the finer details of why the UK solar industry is facing such extreme cuts.

The IA document outlines that due to significant cost reductions in PV technology and high feed-in tariff rates, investors have been benefitting from higher than expected rates of return which has in turn prompted a huge spike in solar installations. It also outlines that DECC aims to promote a “range of technologies” as well as strengthening the link between energy efficiency and feed-in tariffs.

The IA document outlines several options which could have been adopted in order to achieve this, including the ‘do nothing’, ‘low tariffs early’ and ‘low tariffs in 2012’ scenarios.

DECC has chosen to go with the ‘low tariffs early’ option, which involves proposing significant FiT cuts, a December installation deadline and an eligibility criteria – based on energy efficiency – for new PV installations in 2012.

While the IA outlines the why and the how of the feed-in tariff cuts, it doesn’t point out some of the more significant impacts on the UK solar industry.

For example, the document describes that PV installation figures will be decreased by 95% as a result of the proposal – but it doesn’t outline that as a result, many jobs will be lost. It also fails to assess the true impact feed-in tariffs have on UK bill payers, and by how much those who have already installed PV are benefitting from not just FiT payments, but electricity savings and CO2 reductions.

There is also no mention of the company layoffs, investment loss or damage or just how this will affect the thousands of those working in the UK solar industry at present.

The full document can be read here.

The Environmental Audit Committee and Energy and Climate Change Committee are calling for evidence on the feed-in tariffs for small-scale solar photovoltaic energy. The Committees are now inviting organisations and members of the public to submit written evidence, setting out their views on the issues listed above. Submissions should ideally be sent to the Environmental Audit Committee by November 23.