Government Consultation on FIT

The government has confirmed today that it is planning to reduce solar incentives by more than 50 per cent, cutting the feed-in tariffs available to domestic and small-scale business installations, from 43.3p per kWh to just 21p per kWh. The Department of Energy and Climate Change (DECC) today launched a consultation on the proposed changes, confirming it wants the reduced tariffs to come into force as early as 12 December 2011.

Under the proposals the new tariffs would apply to all new solar PV installations with an eligibility date on or after 12 December 2011. Such installations would then receive the current tariff of 43.3p before moving to the lower tariff of 21p on 1 April 2012, assuming the government does not make further changes following the closure of the consultation on 23 December. If brought into effect they would cut rates of return for solar installations from current levels of about 12 per cent to just 4.5 per cent to five per cent. 

Industry experts have warned the deep cuts would lead to a severe contraction in demand, and an end to free solar financing schemes and social housing projects. Leading solar firms are predicting significant job losses if the proposed changes come into effect and are promising to mount a high profile campaign against the scale of the cuts and the rapid pace at which they are expected to come into effect. There are also rumours that some solar firms could pursue legal action against the government over the rapid timeline for the consultation and the manner in which the proposed cuts could come into effect before the consultation exercise is officially completed in late December.

The consultation also proposed a new energy efficiency requirement that would mean any household or business applying for feed-in tariff incentives from April next year would have to meet minimum energy efficiency standards. The consultation suggests these standards could include ensuring the building has an Energy Performance Certificate level of C or above, or requiring people to take up Green Deal measures before they can install solar panels. DECC said that as a transitional arrangement installations with eligibility dates between 1 April 2012 and 31 March 2013 would have 12 months from entering the feed-in tariff scheme to comply with the energy efficiency requirement. 

However, the government said that as part of the review it would "consider whether more could be done to enable genuine community projects to be able to fully benefit from FITs and whether, for example, a definition of community scheme is required and, if so, how this should be defined". 

Solarsense's Position 

Solarsense is working very hard right now, to organise a work plan for installations already in their system, and for any sales taken that will ensure that as many installations are completed by the deadline as possible. It is however, inevitable that they will need to offer some of their customers their deposit back, in order that they can try to find a company who can guarantee an installation date by the 12th December 2011. Solarsense are obviously dealing with many hundreds of calls from worried customers right now and they will be contacting EVERYONE in their installation programme, as well as all sales made in the last fortnight to give them the advice. 

Please note that Solarsense need to evaluate the information they have just been given by DECC before they can formulate a plan of work to cope with the new dates. They cannot give us more information until they have completed this assessment which they hope to have done by early PM 31st October. For installations already completed and registered there is NO CHANGE and you will continue to get the 'old' FIT rate agreed with your energy supplier. 

For any NEW SALES ENQUIRIES, Solarsense are sorry to say that they cannot accept any further sales enquiries based on the higher rates (e.g. 43.3p/kWh). They will however be accepting sales enquiries on the basis of the new FiT rates, which they feel will still make excellent economic sense - more on this to follow later when we have had a chance to look at the figures. 

Sustainable Crediton's Position 

We are shocked by the speed and severity of the changes in the FIT. We had warned last month that changes were afoot, but we could not predict that such drastic changes would be implemented by the 12th December. We will be working with Solarsense to maximise the number of installations made in our scheme by the 12 December. 65 orders have been placed and 32 installations have been completed already. A further 23 installations are scheduled for before the 12th December, with a further 10 installations currently scheduled for after the deadline. We will do our best to see if Solarsense can improve on their installation schedule to include more orders within the deadline. We will ensure that Solarsense contacts all effected customers to explain what they intend to do. Solarsense have stated that where they cannot guarantee to install before the deadline, then deposits will be returned so that people can attempt to find another installer who can meet the deadline. Sustainable Crediton will do its best to work with Solarsense to get at least 51 installations in place during the first year of the agreement. Sustainable Crediton Energy Group will be completing the Government's consultation. We will be meeting shortly to draft our response. We also urge effected Sustainable Crediton supporters to complete the consultation as well as writing or emailing our MP Mel Stride. There is a template letter/email downloadable here.