Industry reaction to FiTs will kill Solar – not Government cuts
Thursday, November 17th, 2011The UK government has merely loosened the head collar but it hasn’t yet killed the beast.
There is plenty of life left in Solar but the industry needs to build business models centred on delivering real value and market the many benefits of Solar installations rather than simply relying in subsidies from the FiTs scheme.
There was serious industry backlash against the UK government’s latest announcement of a massive cut in feed in tariff for Solar energy on schemes up to 4kW in size, from 43.3p per kWh down to 21p/kWh, earlier this month.
Chief Executive of the Renewable Energy Association, Gaynor Hartnell, was reported in the Guardian as saying that she did not believe the department for energy and climate change was winning its argument with the Treasury on the benefits to the economy of renewables. She is also quoted as stating that the government chopping and changing its mind like this and not honouring its commitments (this is the second major cut this year) was undermining confidence in the industry as a whole.
Other industry experts quoted in press articles within hours of the announcement were stating that thousands of contracts had already been cancelled and some Solar companies had started laying people off and making redundancies.
I’m in two minds about this. Firstly, cuts to payments under the FiTs scheme will make some people think twice about Solar installations, but unfortunately much of the subsidy has already been diverted to large commercial energy companies rather than individual home owners or public sector projects as it was initially intended. In my mind the Government should have acted sooner and made a much clearer distinction between the different market sectors. Spending controls are unfortunately now a necessity.
Every fledgling industry needs a helping hand but there comes a time when it should be able to stand on its own two feet. Perhaps that time for the solar industry is now.
There are many benefits and reasons why residential or commercial customers should invest in solar technology. FiTs is just one of them. Alongside the many ‘green’ issues, an other benefit is security of supply and having more control over your energy supply and usage; solar customers can at least rest assured that they can generate energy for their own needs at times when mains electricity may be unavailable. And with talk of possible energy rationing at some point in the future and political unrest globally, that benefit is looking increasingly attractive. Once payback has been achieved, Solar energy is always going to be less costly than many other sources – or even free in certain circumstances.
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