Yesterday’s Government announcement of consultation on a ‘21p’ Feed-In tariff for the most popular domestic PV installations (under 4kWp) has undoubtedly rocked the solar PV sector. However, it is widely held that the current FITs have been very generous, both to installers and consumers. So much so, that despite the imminent prospect of FITs being cut in half, many established PV installers have done their sums and are rolling up their sleeves, believing that big opportunities remain, while accepting that they are going to have to work that much harder for profits.
Yet Greg Barker’s announcement is not just about cutting the tariffs. During 2012, FITs could also be linked to energy efficiency measures and ultimately, the 'Green Deal'. (Which could be something of an arranged marriage since no one knows that much about the Green Deal yet.) These extra conditions to PV installation make sense from a carbon reduction point of view, but they are just that – extra conditions. The net result of yesterday’s announcements is that while the best installers will aim to “keep calm and carry on” there could be major and as yet, uncalculated, impacts in the industry overall. These could include deterring new installers and eroding consumer eligibility, even for those who are interested. It seems likely that the proposals will dampen job growth in the sector.
Although we are pleased to see that Government agreed with our stance that the smallest installations must have the best incentives, we believe that a more appropriate market response to bring the PV industry to a soft landing would have been to set FITs for the very smallest arrays nearer to 30p/kWh. We urge Government to stop making snap reductions to any of the Feed-In tariffs. Greg Barker refers to ensuring growth and confidence in the marketplace but nothing of late has boosted growth, confidence, or for that matter, trust.
The consultation closes on 23 December.
