Government plans to cut Feed-In-Tariff returns slammed

Energy minister Greg Barker has unveiled government plans to reduce Feed-In-Tariff (FIT) returns from solar photovoltaic (PV) panels and purchasing grants by 50% - a move slammed by the solar industry

Speaking earlier today (October 27) at a conference in Birmingham, Mr Barker said the Department for Energy and Climate Change (DECC) would be announcing plans to adjust FITs, in a bid to stop “high net worth individuals chasing returns which are easily reaching double figures at a time when interest rates for savers have reached a historic low”.

Mr Barker argued that FITs are “unsustainable” in the current form and said that PV subsidy would be withdrawn for energy inefficient buildings, but urged businesses to “diversify into new sectors” in the energy efficiency market.

However, the PV industry has warned that the “knee jerk” decision to cut FITs could “kill” the UK’s solar industry.

Commenting on the move, solar installation company Freesource Energy managing director Alex Lockton, said while he recognised the need for subsidy that “the industry needs time to re-adjust if we are to minimise job losses”, adding that “if the cut comes into force in anything less than 10 weeks, it will be a death sentence for many solar companies.”

He added: “We urge government to take the only responsible course of action – give companies time to adapt their business plans. If not, large scale job losses across the industry will be the inevitable outcome.”

According to the Financial Times, the DECC is expected to announce that FITs will drop from its current 43p per kWh to about 20p per kWh.

It is anticipated that the move by the Government to cut PV subsidies for homeowners will result in a hike in PV purchases as people rush to install panels before support is withdrawn.

Under the changes, from April 2012 new domestic PV sites will have to meet minimum energy efficiency standards.

Carys Matthews

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