A number of leading industry experts have lined up to describe the devastation and confusion following today's announcement of a 50% cut in the solar PV feed-in Tariff with an early-December cut off.
Leading renewable expert Professor Stephen Frankel, chair of the Wadebridge Renewable Energy Network (Wren), today questioned DECC's claim, that: "If the Government took no action, by 2014-15 FITs for solar PV would be costing consumers £980 million a year, adding around £26 (2010 prices) to annual domestic electricity bills in 2020. Our proposals will restrict FITs PV costs to between £250-280 million in 2014-15, reducing the impacts of FITs expenditure on PV on domestic electricity bills by around £23 (2010 prices) in 2020."
Professor Frankel, explained: “So the potential contribution of solar PV to the 30% of electricity to be provided from renewables in 2020 is to be jeopardised in order to save consumers a projected £23 each per year in 2020.
“The figure that will matter to consumers in 2020 will be the proportion of household energy cost that this £23 will represent.
“The cost of other sources of energy in 2020 is unpredictable as it will depend on factors outside Government control - the politics of the Middle East and Russia, as well as untested technologies - but it would be unwise not to assume that future cost rises will not exceed the annual 15% rise we are currently seeing.
“The most encouraging take-up of renewable energy generation to date is thus to be curtailed to save people about £23 per year in 2020. This is puzzlingly inconsistent with any genuine commitment to ceasing our dependence on unstable and damaging sources of energy.
“Solar PV is very popular, and many community schemes around the country are making the financial benefits available to as wide a section of the population as possible.
“The public can be misled by alarming projections of the costs of renewables. If people had a clearer perspective on costs and benefits, would they not be pleased to accept a £23 cost in 2020 if that could better protect energy supplies, energy costs, and the environment?”
The Microgeneration Industry said it was reeling from the severity and speed of the Government’s proposed cuts to the Feed-in-tariff for Solar PV in the UK, following a written Ministerial Statement and publication of a consultation.
Dave Sowden, Chief Executive of the Micropower Council, said: “Within four hours of these proposals being announced, we received our first phone call of a company starting a statutory consultation with staff over impending redundancies.
“Cuts to reflect the success of the Feed-in-tariff in reducing the industry’s costs are necessary, expected, and the industry is ready for them. But these proposals go much too far. Under these proposals solar panels will simply become “eco-bling” for the middle classes, paid for by all, including the fuel poor. Yet those on lower incomes will no longer be able to benefit from offerings such as free solar or social housing schemes, due to the financiers of these schemes pulling out.
“The speed of the changes will also leave many companies with stranded assets, a plethora of contractual disputes in the industry, and another race to beat the six week deadline. This is a real mess.”
Richard Lloyd, executive director at Which?, said: “It’s right that the Government properly controls spending on Feed-in Tariffs as everyone pays for this scheme through their energy bills.
“But the Government should honour the existing rate for everyone who has already signed contracts or paid deposits for solar panels. By setting a deadline that is just over a month away, the Government risks creating a surge in demand for FIT that cannot be met in the timeframe, leaving many customers disappointed.”
The Government will cause “boom and bust” rather than prevent it with its proposals to dramatically slash Feed-in-Tariff payments by more than half.
One of the UK’s fastest growing renewable energy companies, Eco Environments, says today’s announcement that the tariff for Solar PV schemes up to 4kW will be cut from 43.3/kWh to 21p/kWh sounds the death knell for tens of thousands of jobs in the sector.
David Hunt, a director with Eco Environments, said: “We do not dispute that the Feed-in-Tariffs should be reduced but to a sensible level. Slashing the payments by 51 per cent is the economics of the madhouse.
“The Government claims that today’s announcement is intended to provide the solar industry with a clear and sustainable growth path, avoiding boom and bust, but its proposals will cause exactly that.
“Companies such as our own, offering a comprehensive range of renewable energy technologies, will be okay in the long-term, but there are many companies dependent solely on solar power which will now go to the wall along with tens of thousands of jobs.”
David Hunt added: “The Government has compounded this nightmare by insisting that the changes in tariffs will take effect from December 12th. This will now cause an almighty stampede and chaos for renewable energy companies and their customers.
“Surely, the Government could have delayed the implementation until spring of next year, giving everyone in the industry time to catch their breath.
“The renewable energy sector is one of the few growing sectors in the UK and global economy, but with today’s announcement the Government has jettisoned the long term view for a short-term gain.
“We will be looking to make the Government see sense and amend its proposals during the consultation process. Businesses, jobs and consumer confidence are at stake unless Ministers row
back from such a drastic reduction in the FITs.”
Richard Horobin, managing director of Kent-based Mygreenpower, added: “Whilst we were all expecting changes to the FIT the size of the reduction and also the revised timescale for implementation are almost unbelievable.
“To give the industry just 42 days notice of seismic changes to the whole industry is both unfair and totally irresponsible. Why can’t this decision be put back to April 2012 to give company like ourselves time to adjust to the new tariff and to complete the projects that we have currently have on our books.
“There is absolutely no doubt in my mind that this ill advised and rushed review is going to cause serious problems for almost every company in the industry and lead to wide spread job losses.
“This government spouts about helping small businesses and getting Britain back on its feet, but if this is how they are going to deal with the problem, would the last person to leave Britain please switch off the lights.”
John Walker, National Chairman of the Federation of Small Businesses, said: “With almost six in 10 small firms saying that rising utilities prices are the main cause of increases to their business costs, the use of renewable energy can help them cut their dependence on the big six energy companies and play their part in increasing the UK’s energy security and reducing carbon emissions.
“While we appreciate demand for the Solar Feed-In-Tariff (FIT) scheme is higher than originally budgeted for, we believe a cut of more than 50 per cent to the tariff will only serve to damage investor confidence in the green economy.
“It would be far wiser for the Government to build on public appetite for renewable energy, and maintain certainty in the market that allows firms and consumers to plan. It should therefore stop short term tinkering with the FIT scheme, and commit to long term support for green industries and the jobs they are creating across the UK.”
Nigel Edwards, Wrexham around 6 months, 3 weeks ago