Harsh cuts to subsidised tariffs for solar power could destroy the sector, Building reported.
Providers have warned that the government-subsidised Feed In Tariff for solar power must not go below 28p per kWh to avoid killing consumer demand.
The Feed In Tariff (FIT) dictates the amount paid to home owners with solar panels for each kWh of electricity they generate and feed back into the National Grid.
The government is due to announce its plans for the FIT level imminently and energy minister Greg Barker has said the tariffs will definitely see a cut to help balance the UK’s finances.
The government plans to slash the rate to 20p kWh, the Financial Times reported. But Damien Green, chief executive of solar panel installers HomeSun, said FIT needed to be retained at a minimum of 28p for the next financial year at least or the sector would be devastated.
Since the introduction of FITs, 25,000 jobs have been created and over 3,000 enterprises started.
Chris Hopkins, managing director of roofers and solar panel specialists Ploughcroft Group and member of the government’s Green Construction Board, said anything below 27p would see companies slashing jobs as consumer demand would collapse.
But he said some level of cut in the FIT was tolerable. “A cut to 27 or 28p per kWh would not be a massive blow. I would say the companies that are working on tight margins will probably cease to exist but the good quality companies which understand renewable energy will be OK. For every pence below that level it has a more dramatic effect,” he said.
In a separate story Construction News reported that the industry is calling on the government to avert ‘disaster’ over the Green Deal as the government prepares to launch its Green Deal consultation document, expected out next week.
Construction firms are still awaiting clarity over a number of issues including accreditation, financing and market take-up with the document thought unlikely to include financial incentives on VAT reductions or stamp duty.
Electrical Contractors Association head of environment Paul Reeve said one area he was particularly concerned about is that extra certification will be added to the existing qualification landscape.
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Paul Reeve is absolutely correct, the current MCS registration is burdensome and too expensive for virtually all small businesses. With costs in the range of £5000+ and intrusive annual inspections to comply with the MCS, most small businesses are just not in a position to put themselves through this for the possibility that there may be some work to not only cover the expense but to even make a profit.
Installers are often already qualified to do this work, they have, as Mr Reeve has commented elsewhere, “a much more direct route to the homeowner”. What we really need is a simple insurance scheme to cover the warranty for the customer and a good practice guide. From what we as installers see so far is that MCS may offer what looks like a safety net for the consumer but in reality the quality of work is often poor and this is not even covered in the MCS. We need a decrease in the paperwork and financial burden not more certification.
If the government are serious about Kyoto then the independent installers MUST be given access to this area of the market. Why do we have a culture of seeing small independent business as being unable to do this work to a high standard when often the exact opposite is true?
As much as I can understand the lowering of the feed in tariff, this cut is too much and will slow if not stop the industry completely.