Solar Feed in Tariff cuts are not doom and gloom
- Published: Friday, 18 November 2011 08:10
With the Department of Energy and Climate Change (DECC) confirming that it is planning to slash solar incentives and cut the Feed-In-Tariffs (FIT) to homeowners from 43p per kWh to just 21p per kWh, the general outlook is grim within the solar industry.
However, Chris Hopkins, managing director of Ploughcroft - the UK’s leading solar installer – is urging people not to panic and to look at the bigger picture, which is vital for creating a sustainable solar economy.
Chris states: “The rate of the proposed FIT cut did come as a shock. We always knew the rate would be reduced as the solar industry boomed, but we did not expect it to be halved. All of the current news seems to be destructive, and this will only destroy consumer’s confidence in the solar market. We need to look at the positives that come from this announcement – and there are many.
“With production and manufacturing costs coming down in price over the last 12 months, and a typical installation now only taking one day instead of two, then it stands to reason that the 41p FIT rate was unsustainable for the long-term. Although a cut to 21p per kWh is a big drop, look back to April 2010 when the FIT was first announced. If technology and installation costs have halved, then it stands to reason that the government would half the tariff.”
Rather than focusing purely on the impact of financial rewards, the eco issues of the solar economy should also be considered. Today’s announcement means:
- The installation cost should drop dramatically – making solar more accessible to the homeowner
- The FIT will still offer a return on investment of between 8 and 9%, which is four times greater than the rates offered by leading banks
- Unethical firms will be forced to close as those with the only goal in making money will fail
- Manufacturers will be forced to cut their high margins
Chris added: “Production and manufacturing prices have dropped massively over the last 12 months. Solar panels are becoming more efficient, which means the average domestic roof installation only takes one day now, when it used to take two. This is making the market much more competitive – and attractive.
“Companies that have entered the solar industry purely to join in the solar gold rush which use unethical sales practice and are unethical and unsustainable. The current FIT makes it too good to be true for them, and the proposed lower FIT rate will mean they cease to exist. Long-term, this is good for the industry as we need companies who are committed to the renewable cause.”
Ploughcroft is the leading renewable energy installer across the UK, and has the UK’s leading renewable energy training facility. This means that Chris remains fully aware of who his competition is, and how they are doing. Ploughcroft will turn anyone who does not have the basic competencies to undergo installation training away.
Chris sums up the new FIT rate in one simple sentence: “I believe that the new FIT will be good for the sustainability of the solar sector.”
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