The UK has about a month left in which to make the most of the current feed-in tariff (FiT) rates for domestic solar installations. After that, the subsidies will be halved.
So, where does that leave the solar PV industry? We’ve compiled some reactions from various sources below. Let us know what you think.
Long-term thinking
“A cut was unavoidable given the rate of installations, module price declines and the capped FiT funding envelope. 50% is a deep cut and it will slow the market significantly for a period of time. These changes will cause a shake-out in the industry where those that can be more efficient, and have diversified into other technologies or business areas have the potential to grow. Many smaller operators are likely to struggle and go under. This will be a tough time for the industry, but it may be that this makes it more sustainable and competitive in the longer term.”
– Daniel Guttmann, director of renewables and clean tech, PwC
Survival of the fittest
“I feel sorry for [smaller or newer solar companies]… The gold rush is over but the proposed new rate is sensible and sustainable. We can cope with it.”
– Kerry Burns, general manager, Solarsense UK
Clarification needed
“What the industry needs to see from the government now is a clear explanation of how, if at all, the Green Deal will serve to plug this funding gap. If this clarification is not provided, then the government is jeopardising future investment in this burgeoning and potentially vital UK industry.”
– Neil Donald, managing director, SIG Energy Management
Negative for businesses
“The government should have made more gradual cuts. It was clear what was being installed, and the knee-jerk reaction is very negative for businesses. It was certainly a bad decision to wait until the market has exploded with big investments having already been made.”
– Ash Sharma, analyst, IMS Research
Joining the dole queue
“The installation rate is likely to fall drastically, and many of the 25,000 newly employed in this industry may end up joining the dole queue.”
– Gaynor Hartnell, chief executive, Renewable Energy Association
Betrayed by Cameron
“We built a business on the back of David Cameron’s promises. He has betrayed us twice. Anybody thinking of investing in government-sponsored green opportunities, I would advise them to run away. All my business will stop with immediate effect if this goes through. It’s an extremely black day.”
– Daniel Green, chief executive, Home Sun
New rates don’t work
“I’ve just been playing around with the figures and, based on the new rates, it just doesn’t work. I’ve spent the past year putting together projects at places like Tewkesbury School and we were due to launch a share offer at the end of last week, but then we started hearing rumours about this announcement. The consultation deadline is actually after that December 12 deadline. This is a decision which has already been made, and basically, we’re stuffed.”
– Kevin Frea, community manager, the Solar Coop
Pulling the plug
“The government has cast a dark shadow over our thriving solar industry and effectively pulled the plug on countless clean energy projects across the country. If we want to wean the nation off increasingly expensive fossil fuels and free ourselves from the shackles of the ‘big six’ energy firms, the government must encourage more households and communities to generate their own home-grown electricity – not slash solar incentives.”
– Donna Hume, energy campaigner, Friends of the Earth
New projects unviable
“At a time of great economic uncertainty, FiT installations are one of the very few things that social landlords can do to support their tenants. However, the proposed level of these reductions will, quite simply, render new projects financially unviable. For the vast majority of social landlords, the risks of projects will be too big and the return on investment too small.”
– MPs, NGOs, industry stakeholders and landlords, in a letter to the Prime Minister
Focus on positives
“With production and manufacturing costs coming down in price over the last 12 months, and a typical installation now only taking one day instead of two, then it stands to reason that the 41p FiT rate was unsustainable for the long-term. Although a cut to 21p per kWh is a big drop, look back to April 2010 when the FiT was first announced. If technology and installation costs have halved, then it stands to reason that the government would half the tariff. Companies that entered the solar industry purely to join in the solar gold rush are unethical and unsustainable. The current FiT makes it too good to be true for them, and the proposed lower FiT rate will mean they cease to exist. Long-term, this is good for the industry as we need companies who are committed to the renewable cause.”
– Chris Hopkins, managing director, Ploughcroft
Our own reaction
“In the grand scheme of the UK’s economy, the amounts of money involved in incentivising the uptake of solar are trivial. It’s disappointing that the Government’s treasury didn’t share sufficiently in the vision of a UK success story to keep the cuts to a level that would allow the industry to continue to grow.”
– Chris Dace, director, Resonates
