Solar industry welcomes FiT clarity

Published:  18 June, 2012

The solar PV industry is welcoming government plans to cut the Feed-in Tariff (FiT) rates from 1 August rather than 1 July as previously proposed.

“Although we had hoped that the government would hold the current FiT for 12 months after it announced the July delay, this latest announcement does provide greater clarity for both the solar industry and homeowners,” said Chris Hopkins, managing director of Ploughcroft and member of the Government's Green Construction Board.

“Any push back in the cut to the tariff rate is good,” said Paul Roche, director of sustainability and renewables at Grafton Group.

“Similarly, any reduction in the tariff is disappointing because it makes it harder to sell.”

Thomas Farquhar, sales manager at Easy MCS, agrees that it brings the clarity installers have been asking for. “They can now make business decisions based on a bit more certainty,” he said.

He thinks the downside is how quickly the cuts will be coming in. “The cuts in panel price aren’t keeping up with the tariff reductions,” he said.

But Hopkins thinks that due to the prices of panels and components slowly falling and the efficiency of the cells slightly increasing, the 3.5% reductions will be absorbed by the cheaper installation of a slightly smaller system.

Anecdotal evidence does suggest that Solar PV take-up has dropped considerably in the last few months.

“The problem is people have lost a little bit of faith,” said Farquhar, speaking of homeowners and installers alike. “They aren’t willing to make the investment they were and want to spread the risk a little bit.”

“Overall we’re seeing people moving over to other technologies such as heat pumps and solar thermal. From our point of view heat pumps offer a lot more sustainability. You don’t need to sell it just on the Green Deal and RHI, they provide savings before you even get to vouchers.”

Roche thinks that, going forward, the plans will provide a steady market and good, solid business. “If they apply the rules fully and properly it bodes well,” he said.

He also suggests that the FiT for PV should be included in the calculation for the Golden Rule, helping both the Green Deal and the Solar PV market.

At Plumb Center’s recent Green Deal Open Day, Greg Barker explained that while RHI and FiT products were not currently included under the Golden Rule, the Green Deal assessment would allow recommendation of such products and there may be room for their inclusion in the future.

“I see a time in the very near future when solar may be able to qualify for Green Deal,” he said.

Hopkins hopes that as the market settles, the unethical get rich quick companies that have popped up will disappear as quickly as they came. He also expects a certain amount of consolidation in the industry, with smaller companies merging and maybe branching into other areas of renewables.

“Greater clarity on what the FiT will be going forward also creates a framework on which solar PV companies can build long term business plans. Businesses such as Ploughcroft, with the scale and efficiencies to work within the lower tariff regime, will be best placed to deliver the Government's renewable target."

“On the whole it will be positive for the long-term stability of the industry but also buying power of the consumer,” he added.

The Solar Trade Association said that it broadly welcomed many of the government's decisions on the FiT scheme and the inclusion of solar in DECC's updated Renewables Roadmap.