Weekly Email News – the future of the building industry

Councils urge FITs cuts delay
Councils will have to pull the plug on thousands of solar panel installations and face being left hundreds of millions of pounds out of pocket because of rushed Government cuts, local authority leaders have warned.

On the day that the last of the 'big six' energy suppliers hikes up energy bills, local authorities have warned that an earlier than expected 50% cut to the rate of Feed-in Tariffs could condemn vulnerable families to fuel poverty.

Many councils have been working to get solar panels installed before the end of the financial year to take advantage of Feed-in Tariff subsidies.

But under plans announced by the Department for Energy and Climate Change, councils will now have only six weeks to get the panels up and running and signed off by Ofgem. Those who fail to meet the deadline would have the subsidy they receive over the next 25 years halved. Subsidies for social housing would be cut by 60%.

The Local Government Association (LGA) has written to Energy Secretary Chris Huhne to urge him to delay the proposed cut until the end of the financial year. This would give councils a realistic amount of time to get in place solar panel installations which have been commissioned on the promise of the current incentives.

Several schemes in progress which could have provided thousands of fuel poor families with free electricity during daylight hours have been stopped immediately, because councils can no longer afford them.

This warning was substantiated by the results of a survey conducted by the Renewable Energy Association (REA) and the Solar Trade Association (STA). They found that:

· Initial impact may result in employment levels falling by 42%
· 95% of social housing tenants may not get the PV panels they were expecting
· 33% of companies fear they may be forced to close
· 90% of companies say the proposed cuts are too deep and too fast
· 98% of companies alarmed by Government’s treatment of the UK solar industry

Reported affected projects include:

• A £5 million scheme in Reading to install solar panels on schools, council and community buildings was set to have been completed by April 2012. Reading Borough Council now says that bringing the deadline forward will make it unviable.
• Plans to install at least 1,000 solar panels on council homes in Leeds have now been put on hold. Leeds City Council estimated the panels would have saved tenants about £120 per year.
• Waltham Forest Council has put on hold plans to install solar panels on 1,090 homes in the area.
• Torbay Council was set to install solar panels on 45 public buildings including schools and council offices next year, but has now put the plans on hold.
• Cambridge City Council was set to install solar panels on council offices, swimming pools and sheltered housing in a scheme that would have generated revenue to protect jobs and further increase energy efficiency on council homes. These are now unlikely to go ahead because it would no longer be financially viable once the subsidy is cut.
• Wrexham County Borough Council recently started work on a scheme to install 3,000 solar panels on council houses, which it had aimed to have completed by the end of March next year. The council has warned that the early cut in subsidy threatens to derail it.