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Reduced FITs proposed for large projects

The Department for Energy and Climate Change (DECC) has published its proposals for a review into the feed-in tariff (FIT), which would see large-scale solar projects of more than 50kW receive lower payment levels.

According to DECC, there is around 169MW of large-scale solar capacity in the planning system, which would fund the solar panels of around 50,000 homes. If the trend continued, it could also see funding for other renewables such as wind and hydro electricity depleted.

"I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed in tariffs, rather than see that money go in bumper profits to a small number of big investors," explained climate change minister Greg Barker.

The Renewable Energy Association (REA) was critical of the move. The organisation said that critical size is needed to achieve price reductions. Before the announcement of the review, the REA estimated that 17,000 new solar jobs would be created by the end of 2011.

The REA said there is disbelief within the industry that the Government has ‘undermined’ the PV sector without having first properly understood its potential.

Gaynor Hartnell, chief executive of the Renewable Energy Association said: “Larger PV projects are cheaper, and have a major role in driving down costs. We don’t want boom and bust in this sector either, but pulling the rug out from under the feet of those that have ventured into this market was precisely the wrong response. The UK will return to the solar slow-lane. It’s as good as a retrospective change and that does untold damage to investor confidence. It’s not acceptable and we will fight it.”

Howard Johns, chairman of the Solar Trade Association said: “The solar industry is one of the genuine good news stories in the UK today, providing both jobs, a new green industry and importantly some hope. Crushing it at this time is a serious strategic mistake but inevitable when it appears to be Treasury, not DECC, dictating energy policy. Not only is solar very popular, it is fast to deploy and inherently safe. We know that DECC can be visionary – it has been on renewable heat – it is in the public interest to apply similar vision to solar to reap the huge benefits of this technology.”