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Another interval in the solar show?

Posted by Chloe Bennett on 17th May 2012

After the 21p kWh Feed-in-tariff rate was finally introduced 1 April 2012, we have all been preparing ourselves for the next reduction set to take place in July this year. However Energy and Climate Change Secretary, Greg Barker, seems to have had a change of heart and confessed his feelings towards the projected decrease on twitter on Wednesday 15th May. "Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in solar feed-in tariffs.”

One could argue that this ‘delay’ in announcing future cuts to the subsidy could bring back another bout of uncertainty however Mr Barker has reassured the nation by responding “On the contrary, we are listening carefully to industry & full details of new much improved FITs regime will be published v shortly.”

On one hand this delay could been seen as another blunder in the way the government has dealt with the popular Feed-in-Tariff however it does mean that installers will be able to supply their customers with the higher rate of 21p kWh for a little longer than once expected.

As for when the cuts will be announced? Government are required by law to provide 40 days’ notice to Parliament of any changes to the scheme and as a result ministers would have to delay cuts until Mid-July at the earliest or else risk legal conflict which could result in future dismay.

It is no secret that drops in the demand for solar PV installation has been of direct consequence of feed-in-tariff reductions however numerous trade bodies have confirmed that ‘solar PV remains one of the best investments around.’ It is thanks to the falling costs of the technology combined with the rising cost in energy bills, the existing rate of gaining 21p kWh is actually proves to be a better investment than if you were to have had the cells installed when the higher rate of 43.3p kWh existed.  A 4kWp system, the largest size for which the highest tariff is available, can be purchased today for under £9,000, whereas only one year ago it would have cost upwards of £15,000.  An average domestic system is around 2.5kWp and it is these positives that need to be held up so that we as an industry can begin to win back the all-important consumer confidence.

Whichever way you look at it, hopefully we can all agree that this delay, even if only for a short period, will benefit the installer as they will be able to provide this higher rate of 21p kWh to their customers for a touch longer. Hopefully a little rush to install PV before the new rate comes into effect will allow solar installers to enjoy a last minute flourish which is the least they deserve after solar has seen as 90% drop off in installations since the cuts came into effect in April 2012.


Categories: solar pv, feed-in-tariff