Anticipated cuts to feed-in tariffs of around 50 per cent will "kill interest in solar PV", restricting the market to small numbers of installations by green households and businesses, according to a senior executive at the UK's largest solar company.
Speaking to BusinessGreen, Seb Berry, head of public affairs at Solarcentury, warned that if reports the government is planning to cut the level of feed-in tariff support for small-scale solar installations from 43p per kWh to around 20p per kWh prove accurate, the sector's recent growth will grind to a halt.
"This will kill interest in solar PV for social housing and free schemes," he said. "It reduces the rate of returns to under five per cent and no investor will go near that."
Berry admitted some projects would continue to go ahead, particularly from businesses keen to reduce their carbon emissions and enhance their green credentials, but he warned that the market would no longer be driven by investors.
Climate change minister Greg Barker today addressed a solar industry conference in Birmingham, insisting he was "personally committed" to driving the success of the solar industry, although he failed to provide further detail on the imminent cuts to the level of support.
However, he did maintain that the feed-in tariff scheme was "unsustainable" in its current form, given that the cost of solar panels has fallen 70 per cent over the past two years. He also called for the industry and government to work together to deliver effective reforms to the scheme.
But industry insiders expressed frustration at the government's apparent reluctance to engage with the solar sector, noting that after his speech Barker refused to take questions from the audience of industry executives and instead opted to host a press conference that was only open to journalists.
Howard Johns of the Solar Trade Association, which is today launching a new campaign called Cut Don't Kill urging the government not to impose deep cuts to incentives on the sector, said the industry was being sidelined by ministers and civil servants.
"[Climate change minister] Greg Barker has called for co-operation between industry and government, but we have been trying to do that and it is just not working," he said, adding that when 84 per cent of respondents to the government's most recent review of feed-in tariffs urged it not to impose deep cuts in the level of support available to solar farms they were ignored.
"We are having to deal with a constant rumour mill where numbers keep getting leaked to the press, but no one is speaking to the industry," he said. "We still don't know when the review will be released, whether it will be a fast-track review, what the cuts will be, or when they will be applied."
Berry argued that the sector was not being granted the same input to policy making as is typically offered to other energy industries. "It is unacceptable that an industry that now employs more people than the nuclear sector has to rely on nods and winks to newspapers to find out what is going on," he said.
Berry also revealed that ministers had failed to honour a pledge last year to set up a government-industry working group to discuss solar policy, and had not followed up on a commitment in the summer to appoint a secondee from the solar sector to work within DECC.
"We are probably the only energy industry that employs 25,000 people that does not have a single secondee within Whitehall," he said.
It has also emerged that the Treasury has rejected official calls for a meeting from the Parliamentary Renewable and Sustainable Energy Group, instructing the parliamentary group to instead meet with DECC ministers.
"If another industry of a similar size wanted that meeting, you would expect a Treasury minister to make time," he said.
Responding to questions from industry executives on Twitter this afternoon, Barker said he planned to host a round-table meeting with industry representatives next week at DECC.
Speaking to BusinessGreen, a spokesman for DECC rejected accusations that the solar industry was being sidelined. "The department has been talking to the industry throughout this process and will continue to do so, but there is a limit to what we can say ahead of the announcement [of changes to feed-in tariffs]," he said.
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