Solar industry pins hopes on U-turn as feed-in tariff consultation ends

Controversial consultation closes today with industry experts warning proposed cuts represent ‘disaster’ for UK solar sector

La Narbonnaise photovoltaic solar farm Alternative Energy, France - June 2009

La Narbonnaise photovoltaic solar power plant in France – in the UK, such large scale solar farms could see feed-in tariff payments cut. Photograph: Sipa Press/Rex Features

The consultation on the government’s proposed cuts to feed-in tariff incentives for solar projects with 50kW capacity draws to a close today, with industry figures warning that the sector faces “disaster” if the coalition adopts its current proposals.

The consultation documents, which were launched in March, propose deep cuts to feed-in tariff incentives of between 40 and 70 per cent for all solar photovoltaic (PV) installations with over 50kW capacity.

A spokeswoman for DECC confirmed that the consultation exercises had resulted in 370 responses as of yesterday.

Some solar firms focused on small scale domestic panels have supported the government’s argument that cuts to the feed-in tariffs available to larger installations are necessary to protect the level of incentives available to households.

But many developers and industry trade groups have submitted responses to the consultation warning that the scale of the cuts will result in a halt to all solar installations with over 50kW capacity.

They have also warned that the way in which the cuts have been proposed ahead of the original schedule for reviewing feed-in tariffs has severely undermined investor confidence in the renewables sector.

Howard Johns, chairman of the Solar Trade Association, said the industry continued to hope that ministers would “see some sense” and drop proposals for deep cuts to incentives that would represent a “disaster for solar in the UK”.

His comments were echoed by Leonnie Greene of the Renewbale Energy Association, who said the trade body would continue to “lobby hard” for less swingeing cuts to incentives.

“Our view is that the overall ambition is much too low and the government clearly does not understand the strategic importance of solar,” she said.

“We are going back to a scenario where a few wealthy green home owners can install solar, when we want to be widening access to solar, particularly through community scale projects.”

Industry insiders have expressed some optimism that the government could rethink the scale of the cuts it is proposing for mid-sized solar installations, particularly after research from building giant Kingspan revealed that, under the proposed feed-in tariff rates, no solar installations with over 50kW capacity would meet the government’s stated target of delivering rates of return of between five and eight per cent for investors.

“There have been some very interesting meetings between government officials and the building industry,” said one industry insider. “They are making their case very forcefully and taking it beyond DECC to other departments. That is having an impact.”

However, Johns expressed scepticism that ministers will agree to significant changes to the proposed cuts, noting that “they seemed to enter into this consultation with a very clear result in mind – which is one of the reasons they are now facing legal action”.

A group of 11 solar firms last month filed for a judicial review into the coalition’s decision to launch the fast track review of feed-in tariffs, arguing that the government had failed to adhere to its own stated processes for changing the incentives. DECC was given 21 days to respond to the legal action and a response is expected in the coming days.

The results of the legal action could still affect whether the government can proceed with plans to finalise the feed-in tariff cuts and bring them into effect from the start of August.

The DECC spokeswoman said the department would now consider all of the consultation responses it has received and decide on how to move forward in due course.

The Guardian

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