[ Spotlight: Solar PV ]
Plan of action To halt the rapid rise in the cost of FITs, in March 2011 the government announced that it planned to reduce FIT payments to new households installing solar panels from 43.3p per kWh to 21p per kWh – lowering the revenue earned by households from an average of £1,100 to £500. It announced a consultation on the proposals, which closed on 23 December 2011. At the time the Energy and Climate Change Minister,
Greg Barker, stated: ‘We must reduce the level of FITs for solar PV as quickly as possible, to protect consumer bills and avoid bust in the whole FIT budget.’ The new tariff had been expected to come into effect
from 1 April 2012. But in October, the government said it would be paid to anyone who installed their solar panels after 12 December 2011 – a move which sparked anger from green campaigners and industry alike.
Court case The government’s plans were challenged in the High Court by Friends of the Earth and two solar companies – HomeSun and Solarcentury – which pointed out that the introduction of the new tariffs was due to be applied before the consultation on them had been completed. They successfully argued that the government’s bid
to cut the subsidies from a date that fell within the consultation period was unlawful. Seb Berry, head of public affairs at Solarcentury, comments: ‘It’s not cutting the FIT rates that that we object to, it’s the retrospective changes which have caused such instability and undermined investor confi dence in the market.’
On 25 January 2012, the High Court ruled that the
The reduced cost of
hardware will counter the reduced FIT and still make this a profi table sector
About the author
Rob Shepherd Rob Shepherd is a freelance journalist and regular contributor to ECA Today, and has worked in the electrical contracting industry for more than 12 years.
government could not reduce solar subsidies, and the decision means (at the time of writing) the current tariff of 43.3p is likely to remain in place until 3 March 2012. The High Court ruled that changing the tariffs before the end of an offi cial consultation period was ‘legally fl awed’. However, the saga is not over yet. After the ruling,
DECC applied to the Supreme Court for a review. The outcome is not yet clear.
What now? There’s no doubt that recent events have rocked the solar PV industry and could undermine many solar contractors who have built up PV installation businesses in the last 18 months. Although there was a huge fl urry of activity towards
the end of last year as consumers raced to qualify for the higher rate, things have quietened down. Griff Thomas, ELECSA’s technical manager for renewables, says: ‘There were 71,000 installations in the last 10 days before the cut-off date, but since that installation activity came to an end, the order books have been pretty empty. Installation rates have dropped to those of December 2010 – a rate of around 500 a week.’
March 2012 ECA Today 25
SHUTTERSTOCK/YE / BIORAVEN
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