The government’s response to phase 1 of the consultation on solar PV feed-in tariff rates was published on Thursday the 9th of February. This prompted an urgent question in the House of Commons by Caroline Flint, Energy Secretary for Labour. You can view the exchange in full by clicking this link
Below is a quick summary of the main bullet points:
The feed-in tariff rates
The 21p rate of feed-in tariff has been confirmed for solar panel installations of up to and including 4kW with an eligibility date on or after 3 March 2012. The rate will start from 1 April 2012. See here for tariffs for other size installations.
Energy efficiency criteria
The Department of Energy and Climate Change (DECC) confirmed that it will make energy efficiency criteria a condition of receiving the full rate of feed-in tariff.
It has backed down on its original proposal that applicants must have an energy performance certificate of level C to qualify. This would have ruled out 90% of houses.
From 1 April any building to which a solar PV installation is attached or wired must have an EPC of level D. According to DECC, just under half of all houses currently meet this category (over 70% of housing association and local authority dwellings). Generators who can’t demonstrate that they meet the standard will get just 9p per kWh generation tariff.
As suggested with the consultation papers, DECC has also brought in a new lower rate for multi-installations. These will apply to individuals or companies which receive the feed-in tariff payments from 25 or more other solar PV installations (regardless of their eligibility date).
Alongside the response to the consultation on the comprehensive review of tariffs for solar PV phase 1 (which was launched in October last year), DECC has also published two more consultations: one on solar PV cost control, and the other on tariffs for non-solar PV technologies. Details of these will follow shortly.
To view the DECC statement in full click here
Our reaction to this announcement
We remain highly critical of DECC for the knee jerk and “botched” delivery of the reductions in the feed in tariff. In our opinion, they have used a sledgehammer to crack a nut.
Despite overwhelming evidence to the contrary, Greg Barker continues to claim that they had to act swiftly as the take up of PV solar by the public was too great. That is simply untrue. What has spoiled the UK solar market are two specific niche markets; namely “Solar Farms” & “rent a roof” schemes.
Had DECC and it’s ministers wanted to, they could easily have brought out secondary legislation aimed specifically at these two areas; simply ring fencing them and putting sensible limits on the numbers being installed AND reducing the feed in tariffs for each one. That simple and effective action would have ensured that the system was not being abused and would allow the slow and steady increasing take up of PV solar by the “able to pay” domestic market plus the SME market, who in truth were just beginning to enter the marketplace. Growth and take up with the latter has been slow due to the economic recession.
We are convinced that if DECC had heeded our advice and acted as outlined above and gave notice back in November 2011 that the 4 kw and under feed in tariff would drop from 43.3p to 21p from April 2012, it would NOT have resulted in a “stampede” by either the public at large or industry. Instead, people would have been given a reasonable timescale to make an informed decision as to whether or not to install PV solar.
Sadly, DECC did not act in this logical and controlled manner. Instead they caused mass panic amongst both the solar industry and the electorate by announcing drastic feed in tariff cuts, right across the board, with only 6 weeks notice and in doing so left themselves wide open to a legal challenge for blatantly breaching their own consultation guidelines. DECC’s “knee jerk” actions have given cause for widespread condemnation by industry at large, local authorities, housing associations, the Church and many MP’s themselves. Furthermore, if they are silly enough to carry out their threat to appeal to the Supreme Court; even though 3 High Court Appeal judges told them they cannot do so; they stand to lose far more than they can possibly gain. If they were to lose in court for a third time, it would set a very dangerous precident for future challenges to government actions, not to mention destroy their credibility with both the electorate and industry. In addition, it will open the flood gates for solar companies such as ours to challenge the government for compensation as a result of their botched actions; which collectively would cost the government many millions of pounds if they were to lose that legal challenge as well.
With Chris Huhne resigning in disgrace and Ed Davey taking over, DECC had an ideal opportunity for the “new broom” to make a clean sweep. Sadly they have failed to take advantage of that opportunity. The “carrot” of investing in solar is very rapidly being replaced by the “stick” and many within industry feel the government are living up to their “nasty party” reputation; which does not bode well for the future of their flagship Green Deal plans.
Written by Jim Gillespie
National Sales & Marketing Director