Unscrupulous firms are cashing in on confusion over feed-in tariffs for green electricity
Is the roof-top solar panel industry nice, green and eco-cuddly – or no better than a bunch of double-glazing sales sharks? This week a colleague received a call from a solar panel company promising that after the industry’s court victory against the government, she could now pick up the juicy 43.3p per kWh feed-in tariff for generating electricity. She was told it made installing a system on her south-facing roof a no-brainer, it was money for old rope.
New adverts all over Google say much the same. “The government has lost!” the ads scream. The 43.3p rate is back, and if you rush in now, you can beat the 3 March deadline and earn a guaranteed 43.3p a unit on your surplus electricity for the next 25 years. If that were true it would indeed be a no-brainer. The price of panels has fallen dramatically, and you don’t have to be a bright spark to work out that 43.3p a unit makes a lot of financial sense if you have the right sort of roof.
Trouble is, the high court “victory” does not guarantee that someone signing up now (and spending upwards of £10,000) will ever see 43.3p a unit for the electricity they generate. Chris Huhne, energy minister at the time, said the government will appeal to the supreme court. All we know is that someone rushing through an installation now may pick up 43.3p a unit. Or they may not. The only guarantee is that you’ll pick up 21p a unit between 3 and 31 March. After that nothing is certain.
Cathy Debenham, who runs the independent YouGen website on which consumers post their experience of installers, says the companies telling consumers they are guaranteed a 43.3p rate are “despicable”. The adverts are inaccurate and irresponsible and full of “false facts”, she says. At least she’s doing something about it; she has persuaded the biggest online sites in the industry to blacklist the cowboy solar companies that are exploiting confusion. “We know there are lots of excellent solar PV installers giving realistic information, and we want to make sure that it is their voices that are heard during this period of uncertainty, not the cowboys’,” she says.
Count yourself lucky if you got the 43.3p. By the time the government slashed them, the feed-in tariffs were excessively generous. In effect, the subsidy came from ordinary households passed on to well-off homeowners with nice large roofs. That’s partly because the cost of panels dropped faster than expected. The government had every duty to act, even if it went about it in a clunky way.
Does a tariff of 21p kill the industry stone dead? Not really. Debenham sees a future for the industry serving motivated individuals with a long-term view, and who are rather less greedy than the fly-by-night installers demanding super-returns. “I actually think it’s a good thing that it’s not silly money anymore,” she says.
Some subsidy was necessary to the industry in its early stages, but tapering it is also essential.
Guardian Money was at the forefront in telling readers just how financially attractive the feed-in tariffs were. When the fog clears, and we have a better understanding of future tariffs, we will run our analysis again. But one thing is certain – the days of easy money are over.