Isra-Mart srl: Solar feed-in tariff review - the reaction

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The government has today unveiled proposals to cut feed-in tariffs for small scale solar installations by 50 per cent. BusinessGreen runs down the reaction from across the industry:

"My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn't fall victim to boom and bust. The plummeting costs of solar mean we've got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.

"Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won't come as a surprise to many in the solar industry who've themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year.

"People who are now thinking of installing solar PV need to do so with their eyes wide open and I'd encourage them to call the Energy Saving Trust for the latest advice."

Greg Barker, Climate Change Minister

"In just 18 months, this Government has conspired to destroy one of the very few growth industries in the economy. Today's announcement puts at risk up to 25,000 solar PV jobs and jeopardises many hundreds of new solar businesses established since 2009. The whole industry has contracts, staff, purchase commitments, stock - all have now been massively compromised by this short-term knee jerk. There is not even any recognition that the industry will need some time to adjust to such a change. There is no question that a "consultation" with an end date of 23rd December slashing tariffs from 12th December is wide open to legal challenge and we now expect a very serious industry challenge to be mounted.

"The industry's "Cut Don't Kill" campaign, which is being backed by Solarcentury, will be fighting today's announcement through the winter, including the first ever solar PV national lobby day of Parliament on 23rd November. Anyone who works in or who cares about the fate of this sector needs to be there. We will not go down without a fight."
Jeremy Leggett, Chairman of Solarcentury

"A cut was unavoidable given the rate of installations, module price declines and the capped FiT funding envelope.

"50 per cent is a deep cut and it will slow the market significantly for a period of time. Having around six weeks until the new cut bites is a double-edged sword. While it avoids creating a market bubble with a rush of installations before the tariff changes, it also only gives the industry a very limited time to adjust to a difficult period."

"These changes will cause a shake-out in the industry where those that can be more efficient, and have diversified into other technologies or business areas have the potential to grow. Many smaller operators are likely to struggle and go under. This will be a tough time for the industry, but it may be that this makes it more sustainable and competitive in the longer term... The crucial thing going forward is that no more quick reviews and changes take place."

Daniel Guttmann, Director, Renewables and Clean Tech, PwC

"The reckless decision to slash feed in tariffs for solar by half poses a serious risk to the UK's burgeoning solar PV industry - and proves yet again that not even a successful, jobs-rich sector like solar is safe from the anti green forces in the Treasury.

"Initial reports of an even more drastic cut - from 43.3p to 9p, said to be the preferred option of some in Government - was nothing short of pre-emptive spin to try to take the heat off Ministers for absolutely failing to defend this flourishing industry."

Caroline Lucas, MP and Green Party Leader

"The Government is taking a sensible approach to protect energy bill-payers with the proposed changes to Feed-in Tariffs. Incentives to overcome the high set-up cost of solar panels and help make our energy supply greener are necessary. But the cost for this is passed onto bills of energy customers and we need to strike a balance.

"Consumers thinking about installing solar panels should still see returns of about five per cent. However, the speed of the changes, with the 12 December deadline, will mean that some people who have already signed contracts could end up getting a lower return than they bargained for. This is a particular concern as we know installers have been slow to process the paperwork needed."

Mike O'Connor, Chief Executive of Consumer Focus
"The real story here seems to be that due to pressure from George Osborne and the Treasury, DECC has had to cut the one scheme that gives households control over their rising energy bills. We're concerned that these changes show that the Treasury doesn't have a real grip on the economics of the energy market, and in particular the value of energy generated in the UK compared with the energy we have to import from abroad. Make no mistake - as a result of these cuts, fewer people will become microgenerators and the prospect of a stable energy future for Britain looks ever more distant."

Juliet Davenport, chief executive Good Energy

"Such deep cuts to the tariff would kill the UK solar industry stone dead. We are happy to accept some cuts, but the Government must recognise that wiping out 4,000 companies and 25,000 jobs by cutting too deeply would be an appalling waste of economic potential. Our message to the Government is cut us, but don't kill us - we want a sustainable cut that would allow us to survive and deliver the green growth that David Cameron said he was committed to."

"The Government has a choice - either they can cut like this and make an entire industry go bust, or they can work with us to properly plan the phasing out of the tariff bit by bit, which will produce a flourishing industry that won't need any subsidy or support."

Howard Johns, of the Cut Don't Kill campaign, which is organising a day of action in Westminster on November 23rd to protest against the proposed changes