Members of the solar industry have accused Ministers of unnecessarily damaging the solar industry, as the UK solar market prepares for a new round of deeper cuts to the feed-in tariff, planned to take place from July 1.
David Hunt, Director of Eco Environments has joined other prominent voices in the UK solar market such as the Cut Don’t Kill campaign, in voicing his disappointment at Governmental plans to further cut the FiT rate.
As of July 1, DECC will be slashing the FiT subsidies available for <4kW systems from 21p down to an expected rate of 16.5p or 15.7p. However, the rate could be set as low as 13.6p depending on capacity installed between March and April.
Hunt points out that under the present FiT rate, the return on investment is more than 10 percent and is index linked and tax-free, fixed and guaranteed for 25 years. However, when the rate reduces to 15.7p, as Hunt predicts, then the potential return on investment will drop to between 4 and 6 percent.
Commenting on the looming tariff cut due in less than 60 days, Hunt said: “This is the final chance for consumers to secure a fantastic return on investment if they go ahead with a solar PV installation before July 1.
“After this date, the FiT rate will drop dramatically to 15.7p and potentially lower still, which will make a domestic solar PV scheme appealing only to the really green investors rather than those who are coming at it mainly for the eye-watering financial returns.”
The solar industry is becoming increasingly vociferous in its condemnation of the proposed cuts after the latest FiT revisions, which slashed the rate by more than 50 percent, have appeared to stopped the industry dead in its tracks as installs have slumped by over 90 percent.
The Solar Trade Association has attempted to revive the flat-lining industry by promoting the merits of a 21p FiT rate. STA Chief Executive Paul Barwell said: “Despite all the reported ups and downs for the solar industry in recent months we want to get the message across to householders that solar is a good investment at current tariff rates.”
The STA became concerned after a number of members reporting drops in their order books post-April. The body is keen to better engage the public and help explain that cost reductions in solar panels have been so marked that dramatic cuts in the feed-in tariff can be accommodated.
Barwell continued: “Cutting the tariffs in half may look drastic, but the public need to understand this is not a problem for them because the costs of solar have fallen so fast. Solar is a great investment and spring is a great time to invest.”
However, DECC’s latest round of cuts are considered a step too far by many in the industry. Many believe that it would be completely “untenable” for installers to keep pace with the level of Government’s proposed FiT reductions as product prices are not coming down at the ambitious rate projected.
Hunt concluded: “Government would like to have us believe that the draconian slashing of the feed-in tariff rates during the past six months is about providing medium to long term certainty in the market.
“Back in the real world, Government’s chaotic handling of the FiT rates is killing tens of thousands of jobs in the renewable energy industry and taking away from consumers one of the best financial investments available to them during extremely uncertain economic times.
“Perhaps the Ministers responsible will one day explain why they have been so hell-bent on hurting both industry and the consumer with their reckless policies.”