Consumers and installers of solar PV panels have reacted furiously to the details in yesterday's leaked document, which revealed the Government's planned 50% cutback of the Feed-in Tariff rates.
Solar businesses have now called on energy ministers to look again at Monday's scheduled announcement, in which they are expected to confirm a December 8 cut-off for the current, higher rate of cash payments.
Many would-be consumers have said the six-week window gives them no time to clear planning regulations and order-book waiting lists to install panels to qualify for the current 43.3p/kWh rate.
They say the early-December deadline detailed in the Energy Saving Trust briefing paper effectively instantly guillotines the current financial FiT support for solar generators.
According to the document, the UK Government is to reduce the level of cash payments it provides for new domestic solar panels from 43.3p to 21p per kWh.
Energy ministers claim the six-week window will allow installations currently on order to be completed and qualify for the current high tariff.
The reduced rate of 21p/kWh will affect all photovoltaic installations below 4kW accredited after December 8, although the previous tariff of 43p/kWh will be paid until March 31, 2012, after which the revised, lower rate will be introduced for the remainder of the 25-year contract.
In addition, all new domestic installations must be accompanied by an Energy Performance Certificate (EPC) with a level C or above from April 1. Alternatively, properties that have completed all Green Deal measures will also qualify.
If households do not meet the energy efficiency targets they may only be eligible for an even lower tariff.
Shaun Taylor, managing director of Buckinghamshire-based SolarTech, said: “If this leak proves accurate then the Government will be condemning tens of thousands of residents in social housing to continued fuel poverty as there is no way that 'free PV' schemes will now be financially viable.
“The impact on employment will also be enormous as the industry had forecast 20,000 to 30,000 jobs would be created in this sector.
“If the Government's plan was to add to unemployment, close businesses, leave thousands in fuel poverty and miss our European Carbon Reduction Targets then job done! Let’s hope that this leak doesn’t turn out to be accurate and drown the industry.”
Richard Lockhart of Renewable Resources Energy Solutions added: “A lot of PV businesses buy panels and equipment in advance in bulk to get good prices, they train and recruit qualified installers, etc.
“A lot of private people wishing to install place deposits, we are all now about to suffer.
“This deadline is totally impracticable. Since the last announcement in February 2011 and the subsequent changes to FiTs that took effect in August (where it was confirmed that no further changes would be made to FiT bands - without another review and anyway not before 31st March 2012) a large number of businesses have stuck with it and gone ahead with their business plans on this basis.
“A large number of people who have lost other jobs, often public sector jobs, have – at their own expense often – retrained into this industry and many companies have spent massive amounts training up their own people.
“Managing the business requires forward planning, which involves buying panels, inverters, hiring people, training them, buying, renting installation equipment transport, etc, taking on other costs to enable them to meet the deadlines imposed.
“These businesses and many of the people in them will now go to the wall – as it will be uneconomic to install panels on domestic installations with a FiT at this level as the payback period will be too far away to entice anyone.
“A return of 4% is now likely - and you can get that, even nowadays, from almost anything - even an indexed gilt does 3% or more.”
A Somerset-based installation company said: “We are only a small company employing 16 people, but expanding with big plans to employ more people. What now, unemployment?”
Another firm said: “[We have] just put a second staff member through a City and Guilds' course for £780, and for what? We have 10 orders but how can we get them in before December?”
Another comment received by ClickGreen said: “What certainty do we have that they will not just cut the tariff once we have it installed? Is there a contract or is it 'trust'?”
One would-be green energy consumer wrote: “Great, received my first few quotes today, and now not sure if I should even bother ordering.”
Another commented: “Really hope this proposal does not come into effect. If it does the consequences to people that have invested a lot of money will be terrible.”
A further message reads: “Any such change will kill off the domestic market at a stroke as the payback period of 18 years will be too long to make it worthwhile.”
Currently, an average 2.9kW system will generate an estimated £1,190 a year under the current FiT rate of 43.3p/kWh. Following the introduction of the proposed 21p rate, the same system will generate £640, extending the payback period of an £11,500 installation from 10 to 18 years.
The Government says it is moving forward the tariff cut after the first phase of its Comprehensive review found that, since the scheme started, the global costs of PV panels have fallen significantly.
It says this, combined with other factors, has meant that the returns available from PV are now far higher than originally intended. Originally the plan was to provide generators with a rate of return of around 5-8%. Actual returns were much higher - around 10%. The Government's plan will now mean a rate of return of 4%.