Feed on

In the past few days the coalition government, and more in particular the Department of Energy and Climate Change have stated that the available Feed in Tariff rates which reward, inter alia, makers of solar electricity will be significantly reduced. Prior to this statement consumers and solar panel installers were drawn into making the most of this imaginative and eco-friendly energy source because of the astoundingly worthwhile rates available: an average house could expect to collect 43p for each unit of solar electricity created along with 3p for every unit exported to the national grid. This did mean that the average financial advantages of a residence with a solar panel installation came to £1700 on a yearly basis. With the suggested modifications, which are being introduced in several months before originally planned, the rates are set to decrease, and numerous people who had envisioned their installations to be finished prior to the new rates kicked in are now confronting extreme discontent. Consumers and also solar panel installers alike are therefore in a state of distress and shock, as the announcement came up out of nowhere. Thousands of contracts for installations have already been entered into to be completed before the March deadline day, but now, they will all be lost. Consumers will certainly feel scammed and the solar panel sector will now have a considerably harder job on their hands. Since the industry employs around twenty-five,000 people according to many reports, the likely consequences of this decision are extremely far reaching.

Responding to these unbelievable governmental plans a group of leading solar PV corporations plan to begin legal proceedings to acquire an interim injunction, whilst friends of the earth are set to apply for judicial review. They both desire not necessarily to avoid a decrease in the Feed in Tariff rates, but to quash the decision that the brand new rates will apply from December of this year as opposed to March of the coming year. This will permit them to continue with agreements which were legally entered into, avoid disappointing thousands of consumers and avoid the danger such a rash move might do to solar panel installation companies as well as their workforce could be subject to.

Reduced Feed in Tariffs for solar panel installations: it’s not all awful news

Whilst it would be tricky to argue that the manner in which the government has gone about announcing as well as implementing these proposals has been by any means reasonable, the substance is probably not as cataclysmically terrible as people first think. Yes the feed in tariff rates have been reduced, and yes the boom time of solar panel installation may well see a small decline, but will it completely stop? The answer to this in my opinion is really a resounding no. The rationale behind changing the Feed in Tariff rates is the fact that as the industry grows and demand increases, so will the production of vital elements to solar panel installations. Because of this these elements become cheaper. If the Feed in Tariff were to stay the same whilst the price tag for the solar panel installation went down, this would not echo current market trends.

As a result, the return of investment available before the proposed changes come into effect could very well return in the near future because the price tag regarding solar panel installations reduces proportionately. There may well be a few months of lag, but the death of the solar panel industry is certainly not nigh, whilst the excellent returns available to customers will remain. As a result although the legal challenges will be a pleasant blessing to the solar panel industry in the event that they succeeded, they just don't spell the end of the line.