Feed In Tariff Review For Pvs Throws The Industry Into Turmoil

Solar PV advocates have launched an online petition against the government’s proposals to cut the solar Feed-in Tariff by 50%.  A reduction in the FiT has been expected for some time, due to the popularity of the current scheme and the rapidly falling cost of solar installations. The debate rests on how much the FiT should be reduced by.

But the industry is warning that such a rapid and drastic cut will put the growth in solar installations at risk, along with around 25,000 jobs, there likely to be a complete hiatus in demand following the date the reduced rates come in and the results of the consultation process are known, and many companies are likely to go to the wall.

The FiT makes solar installations more economical by providing guaranteed long-term prices for the electricity they produce. However, the government significantly underestimated the popularity of the current FiT, the Department of Energy and Climate Change (DECC) has admitted. A flood of solar installations followed its introduction with over 100,000 put in place, around three times more than the government projected.

In the meantime, the plummeting cost of solar panels has helped to reduce the cost of installations by around 30%. As a result, the government says that solar installations would still be economical even with a reduced FiT.

Many companies are reporting a shortage of equipment as they try to install as many systems as possible prior to the 12th December cut off date.  Debate rages about how the government can introduce a consultation process with the end set at the 23rd December, and the results being expected in February next year and yet the new rates are being introduced from the 12th December.  Legal challenges, debates in the house and also within the EC Commission are expected as the industry tries to get this decision overthrown or at least the rate reduction deferred to the expected review date of the 31st March 2012.

To sign the online petition, visit http://epetitions.direct.gov.uk/petitions/20912.

DECC is also holding a public consultation which can be found at https://econsultation.decc.gov.uk/office-for-renewable-energy-deployment-ored/comprehensive-review-part-1/consultation/intro/view.