Isra-Mart srl:Shell-shocked solar industry vows to fight government incentive cuts

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"Disbelief", "betrayal", "far worse than anticipated", those are just three of the responses to today's launch of government proposals that aim to slash the level of feed-in tariff incentives available to large solar installations.

The solar industry had been bracing itself for relatively deep cuts to the level of incentives available to installations with over 50kW of capacity, but developers were still left shell-shocked by proposed cuts to mid-sized installations – including roof-top projects – of between 39 and 49 per cent, and cuts to feed-in tariffs for larger solar farms of over 70 per cent.

"This is far worse than anticipated," said Ray Noble, PV specialist at the Renewable Energy Association. "This industry has been strangled at birth."

Jeremy Leggett, executive chairman at Solarcentury, went further still, accusing the government of betraying the industry. "Since the Comprehensive Spending Review, I've had numerous conversations with Ministers during which I have been assured that any urgent review of feed-in tariffs would be carried out after publication of a proper trigger and would in any case exclude built-environment PV," he said in a statement. "The Government has not only betrayed those assurances, but today proposes feed-in tariff rates that would ensure the UK PV industry stalls."

The government's consultation on the proposed cuts will now run until Friday 6 May, but experts from across the industry are already warning that hundreds of planned solar projects will be postponed or axed altogether if the cuts are enacted.

"For the bigger installations, the levels are quite low or very low," Daniel M. Guttmann, a director at PwC, told BusinessGreen. "What that means is for anything more at 50kW or above, it will put a rapid hold on developments that aren't already a long way down the pipeline. There will be some that still make it but there will be quite a lot of head scratching around whether development can continue in the UK with these numbers."

Chris Stubbs, director at global environmental consultancy WSP Environment & Energy, warned that the cuts would not only block the large solar farms the government originally said it wanted to scale back, they could also affect green businesses planning to deploy larger rooftop solar systems.

"These revised tariffs would pull the rug out from under many commercial roof-top schemes," he explained in a statement. "Of course, this will achieve the government's goal of making 'fields' of PV arrays in the countryside unviable, which was the intention, but it's a great pity that it will also stop larger roof-top arrays such as those being proposed for warehouses and distribution centres."

The government maintains the cuts are necessary to stop larger installations eating into the funding available to domestic rooftop installations, and today insisted the new tariff levels would simply bring the UK into line with Germany.

"I want to make sure that we capture the benefits of fast-falling costs in solar technology to allow even more homes to benefit from feed-in tariffs, rather than see that money go in bumper profits to a small number of big investors," said Climate Minister Greg Barker in a statement. "These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers."

A number of solar firms specialising in domestic rooftop solar panels have supported the government's position, arguing that overly-generous incentives for solar farms risked undermining adoption of popular small-scale systems.

However, other experts from across the industry lined up to counter the government's arguments.

Guttmann insisted drawing comparisons with German tariff levels was ill-judged. "The current system in the UK is generous to kick-start an industry that wasn't in existence before," he explained. "In Germany, buying and installing a system is 70 per cent cheaper, so you need a higher tariff [in the UK] to bring costs down. Now the tariffs are lower than in Europe, but still have prices higher than Europe."