The government has confirmed plans to more than halve state subsidies for solar panel schemes of up to 4 kilowatts
In a written statement to Parliament, Greg Barker, the energy minister, also promised to implement minimum efficiency standards for buildings applying for the subsidies, reported sister title Construction News.
Barker said the solar subsidies, known as feed-in tariffs, had been heavily over-subscribed and risked creating a boom and bust in the solar energy market.
But firms which have geared themselves up to take advantage of the subsidies have been stung by the timescale of the proposed cut. Under the proposals, which have yet to go to consultation, any schemes installed after 12 December will only be able to receive the tariff until April next year.
The government move follows a PwC report last week which suggested that even a halving of the tariffs, might not be enough to fund the programme beyond 2013. The scheme was supposed to last until 2015.
Barker said the average cost of domestic installation had fallen by 30 per cent since the scheme was introduced in April 2010.
‘My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust,’ he said.
‘The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.
‘Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won’t come as a surprise to many in the solar industry who’ve themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year.’
Feed in Tariff for generators under 4kW capacity will be 21p per kWh from April next year. This is down from 43.3p per kWh rate.
Why are we unable to learn from the Germans and invest in sustainable technology, creating green jobs?
Paul Hinkin, managing director of Black Architecture, said: ‘That this a massive missed opportunity. The intention of the Feed in Tariff was to encourage the adoption of clean, sustainable technology and grow a meaningful renewable sector in the UK.
G’ermany adopted this approach more than ten years ago and stuck with the policy until the point where it had achieved this objective and FiT’s were no longer required. By reducing FiT’s by 50 per cent the UK will not achieve this and will be left with no alternative to nuclear energy if we are to meet our carbon reduction commitments. Why are we unable to learn from the Germans and invest in sustainable technology, creating green jobs? God knows we desperately need them.’
UK Green Building Council director of policy and communications John Alker said: ‘While the Feed-In Tariffs are starting to have the desired effect and reducing the cost of installing solar panels, the planned cuts to the FIT are a blow to the solar market.
‘The depth of the proposed cut coupled with the speed with which this change will be rolled out means that many proposed solar schemes will be scrapped before they have even started. The success of the FITs scheme so far shows the potential for the UK to create green energy and green jobs – both of which could be jeopardised by today’s decision.’
Speaking at Prime Minister’s question time in Parliament on Wednesday, Alan Whitehead, Labour MP for Southampton Test, added: ‘Just before the election the Prime Minister said his government would be the greenest ever.
‘Does David Cameron still take this statement seriously, and if he does will he personally intervene to sort out the appalling chaos caused by the slashing of feed in tariffs in six weeks time for solar PV, leading to substantial job losses, chaos in the solar PV industry and devastation for hundreds of community renewable projects?’