Solar industry limbo to continue

UK: The solar industry remains in “total limbo” after a day of legal argument failed to determine if the Government has the right to appeal in the row over feed-in-tariff incentives.

David Hunt, a director with leading renewable energy company Eco Environments, said: “The Government has not covered itself in glory during this whole sorry saga, and today’s outcome further exacerbates the negative impact of their actions.

“The industry needs to move forward without the prospect of months of continued uncertainty hanging over it. While the reduction in the feed-in-tariff to 21p/kWh for domestic customers is greater than we would have wanted, the industry now accepts that we have to work with the new rate which still offers a fantastic return on investment for homeowners.

“The failure to even agree whether an appeal can be heard is another hammer blow to our industry – the only winners today are the lawyers.

“If the Government is ultimately successful with its appeal, the industry is spared the return to a 43p domestic FIT rate which will blow an already overspent budget, causing a short boom, and a catastrophic bust for the renewable energy industry, not just solar.

“The FIT budget is not separated by technology, if it is all spent on solar PV, then Wind, Hydro and other eligible technologies will lose FIT subsidy too. However, it would cause long term uncertainty for the industry, having created a precedent that Government can make retrospective changes to FIT and other subsidies, giving major concerns to any potential investor, domestic or commercial, now and in the future.

“If on the other hand the Government loses any appeal, then we will end up with the boom and bust, wiping out the FIT budget at a stroke. This will result in a nightmare for all renewable installers with short term ‘cowboy’ selling and long term job losses and company closures.

“To compound the issue the state of total limbo is likely to continue, with either side going to the Supreme Court if they lose. The only certainty is seems will be ongoing uncertainty which is already costing jobs and creating a crisis of confidence among potential investors. This will not help to secure the futures of many companies which simply will not survive another few months’ of paralysis.”

Hunt said that he and colleagues within the renewable energy sector still have their guns on a number of other aspects still out to consultation.

Perhaps, the most serious issue surrounds Ministers’ plans to insist from April that all homes must achieve a C-rated energy efficiency standard in order to qualify for the full feed-in-tariff subsidies.

Nine in 10 homes do not currently meet this rating and bringing homes up to the required standard would cost between £5,500 and £12,000 according to industry experts – an investment well beyond the majority of people.

Hunt added: “It is vitally important that the Government steps back from the brink and removes the requirement that says every home must achieve the C-rating for energy efficiency in order to qualify for the maximum feed-in-tariff incentive. That is if we still have any feed-in-tariff left after the High Court judgement!”