The sun has got his hat on and he’s heading out the door; the old song gains a less than jolly twist when it comes to the Government’s reduction in Feed-in-Tariffs (FiTs), slashed by half this month, so is that it for solar electricity’s sunny disposition? Mark Cantrell reports.
The Government’s decision to slash Feed-in-Tariffs (FiTs) has not proved popular, provoking
fighting talk and dismay, along with accusations that the Government has effectively pulled the plug on solar electricity generation on homes and local authority buildings.
The cuts could kill the UK’s solar industry “stone dead”,said one insider when the Government first announced the reduced rates earlier this year.
Another declared: “We will not go down without a fight.” Heady stuff, but the Government’s decision to reduce FiTs on solar PV installations by as much as half has ruffled rather more than feathers.
In October, the Department of Energy and Climate Change (DECC) proposed slashing the tariff paid on schemes of up to 4kW from 43.3 pence per kilowatt hour (kWh) to 21 pence per kWh from 12 December this year. It also proposed cutting the tariff payable to schemes between 4kW and 250kW. The justification was to prevent “boom and bust” in the solar industry and place it on a “steadier, clearer and sustainable growth path”. But as far as its critics are concerned, DECC has effectively destroyed the industry in order to save it.
The Local Government Association (LGA) claims that the majority of councils that had “imminent plans in the pipeline” have had to “pull the plug” on solar panel installations to houses, schools, leisure centres and town halls because of the cuts.
Leeds City Council provides a case in point of how the cuts have forced a rethink on solar electricity. Shortly after DECC’s announcement, the council revealed a major project to install 1,000 solar panels on suitable council homes had been put on hold – effectively cancelled – because the cuts “mean our solar panel project is no longer viable”.
Installing solar panels on social housing would have saved around £190 a year on fuel bills for the average household, according to the LGA, but it said that many councils have been forced to “cancel contracts and break promises” made to thousands of tenants. DECC has, in effect, moved the goalposts for those looking to promote renewable energy, energy efficiency and addressing issues such as fuel poverty.
“Local councils and local people are paying the price for this Government department’s mistakes,” said councillor David Parsons, chair of the LGA’s Environment Board. “People trust and rely upon their local council for help. But broken promises of funding from DECC have left local authorities unable to afford to meet the promises they made to tenants who will be left hundreds of pounds worse off as a result.”
The National Housing Federation (NHF) has also expressed concerns. The organisation believes the reductions will “make large solar schemes in poorer neighbourhoods financially unviable”. The lower rates will also “result in millions of tenants missing out on cheaper energy deals even though they would be paying a surcharge on their energy bills for the initiative”.
Councillors have expressed their discontent rather mildly, one could say, compared to those who are looking to make their livelihood in the field of solar electrical installations.
Certainly, DECC’s proposals provoked some fury amongst the installation sector when the announcement was first made. “Such deep cuts to the tariff would kill the UK solar industry stone dead,” said Howard Johns, of the Cut Don’t Kill campaign, a coalition of solar energy companies spearheaded by Solar Century.
The Solar Trade Association (STA) estimates the impact of the cuts might be the loss of around 11,000 jobs nationally, based on a survey of 139 of its members. This represents a contraction of some 42% in terms of jobs. The association added that it feared upwards of 33% of companies may be forced to close.
Jeremy Leggett, Solar Century’s chairman (he of the ‘fighting talk’ talk), said: “It is profoundly depressing that the greenest Government ever has after 18 months launched such an assault against a growing industry employing 25,000 people. I would much rather be helping to create many more Big Society jobs than taking the Government to court but sadly they leave us no choice. The banks get eight years to change, we get less than eight weeks.”
Councillor Parsons added: “This is going to have a major impact on families who could have benefitted from cheaper energy. We have also seen that it is likely to lead to the loss ofthousands of jobs as energy firms find contracts falling by the wayside. Councils were spearheading the rollout of tens of thousands of solar panels on public buildings and the homes of those who could not afford to do it themselves. By moving the goalposts at the last minute, the Government has risked undermining confidence in its green agenda.”