As an installer you can imagine that I have an axe to grind.
I agree that the FiT system is a badly designed one, the rates were set far too high in the first place, there were no requirements for energy efficiency, and the whole system has attracted the worst of human nature - basically greed. People who don’t give a damn about the environment have suddenly become green with the latest shiny toy on their roof, and they earn a packet to boot, and can drive about in their gas guzzling 4X4s and BMWs with impunity.
As installers of a range of technologies I have seen our clients going from people with basically a "green" agenda, to those whose only concern is how much can they make from it. The whole market has been shifted to interest in PVs, to the detriment of other techs.
It used to be the set question, "What grant can I get?", now it is one of solely “how much can I earn?” This has been exacerbated by many organisations such as the EST who even have an online calculator to get people drooling - showing how much they will earn from the FiT.
I think the government is right to reduce the rates. People could spend around £11k on a system and earn a round £1,800 a year - not bad for an investment in this day and age, I will leave you to work out the percentage return on capital. Then add to this the fact that it is indexed linked and guaranteed for 25 years. Not surprising the demand for PVs has gone through the roof.
When I fitted PVs to my roof 8 years ago (yes I did get a grant), I worked out that had I paid the full rate, it would take 80 years to pay for itself at the price of electricity then ignoring inflation – a non starter in anybodies book financially but that is not why I did it.
I believe the rate was set far too high in the first place, and with the increasing levels of demand, it was inevitable that it would become oversubscribed. Not surprising then that the government has reacted like it has.
Systems have come down in price by at least 30% since the FiT was introduced, there should have been a reduction in April 2011 of around 25% which was how much systems had come down by at that stage from when the scheme was first introduced.
Companies who up to now have had no interest in green issues have seen a golden opportunity to make money capitalising on a stupid system and human greed. Yes there will be layoffs and liquidations, but who is to blame for that. The old adage about “if something appears too good to be true it probably is” should have been applied when companies built their business plans. I do feel sorry though for people who thought they had got a job for life probably facing redundancies, the first round of which has already been implemented by some companies.
As a company we have been here before, with the fiasco that was the Low Carbon Building Program, and seen our business go from boom to bust to boom to bust to now a PV boom. We were expecting a significant reduction in turnover following a review in March, but I built that into my plans, just as well my plans are extremely flexible given the current situation.
I guess the real issue here is not that the FiT has been reduced, but the way that the reduction has been managed. How can they launch a consultation period which ends on the 23rd December and then in the same statement reduce the rates by 50% from the 12th Dec. The results of the consultation period will not be known until February next year. It is on this basis that many challenges both legal and in the House and EU Commission will be mounted.
For those of a purely mercenary nature PVs will continue to be a good investment. I predict that to keep their order books going, prices will be reduced by installers to around £10k for a 4 kW system, which has the potential to earn £900 a year. In my view still not a bad investment in this day and age.
So we have a situation, get over it, stop moaning and lets work out how we can achieve a more sustainable future.
If you want to add your name to a petition there is one at http://epetitions.direct.gov.uk/petitions/20912
which at least is better worded than the one already mentioned above. Don’t know what effect it will have but there we go.
Just dont get me started on the Renewable heat incentive that is all I ask
Oh well that’s my rant over. Time to get on with life.