Remember, remember, the 12th of December….

Hello everyone – sorry for not posting in the last couple of months but we have been an extremely busy at Integr8 especially with the news that the government is cutting the solar PV tariffs by half (http://www.energysavingtrust.org.uk/Generate-your-own-energy/Financial-incentives/UK-Government-proposed-changes-to-solar-PV-Feed-in-Tariffs) on 12 December 2011.

The tariff was due for a review in April 2012 but the government decided to bring it forward because of the high success of solar PV installs in the UK over the last year – saying that this growth is unsustainable and unaffordable in the long run. Put simply, according to the government, if we continued with the current level of incentive then the money for the FIT would run out. http://www.guardian.co.uk/environment/2011/nov/30/greg-barker-bonkers-solar-cut

It seems that the success of the feed in tariff has been its downfall. The generous tariff for under 4 kW systems has meant that people could expect a return on their investment in under 10 years (and with falling prices for PV equipment over the last year or so, this rate of return was always going to get even better as companies sort to compete in an ever-growing and competitive market).

The introduction of the FIT  in 2010 was a watershed moment in the renewable energy industry in the UK – and made the installation of solar PV panels in particular a viable investment for many people. It was a first if its kind in the UK and the government should be applauded for introducing it in the first place.

The UK has a commitment to having 15% of our energy resources coming from renewables http://www.carbontrust.co.uk/policy-legislation/Energy-Supply/renewable-energy/Pages/the-renewable-energy-strategy.aspx and the FIT was one part of its commitment to achieving this level.

It is quite a tricky situation. On the one hand you feel for a lot of companies that may go out of business as a result due to cancellation of current and future jobs. The solar PV industry created thousands of new jobs and being a green industry this surely would have been a boost to our economy. Perhaps if the economic situation was not as it is there may have been more money to put into the FIT budget and this cut would not have to happen…?

How will the cut affect the popularity of the scheme for Solar PV in 2012? We will have to wait and see. Obviously if a payback suddenly doubles from what it would have been, this may put people some people off. Even though solar PV is a part of our business it is not the only part. We design and install solar thermal and heat pumps and also wind turbines. This puts us in a strong position within the renewables industry as we have a range of technologies available for our customers.

Electricity prices will surely continue to rise, and with falling equipment prices, the impact of the cut may not be as severe as some are saying. Don’t get me wrong – the cuts are harsh and very sudden but the incentive is still there – it just has been protected to make sure it lasts the course.

Please give us your feedback on this situation – if you have installed or were thinking to install solar PV for your home or business, what are your thoughts. We would like to hear from you.

Thanks!

The Integr8 Team