http://www.guardian.co.uk/environment/2011/oct/28/solar-subsidies-cut-half

I guess its a sensible decision for the long term, but there are going to be lots of smaller installation companies adversely affected.

This from PwC has the nail firmly hit on the head.

But the consultancy PwC argued that the deep fast cuts proposed by the government were better than the risk of a bubble which would lead to over capacity in the short-term, followed by cuts later, which would mean sharper job losses. “A deep and fast cut in Fits will be required to protect the UK solar industry from stalling or creating a market bubble before any rate changes take effect,”

I’m definitely not complaining though. 😉

All very well, but if you invested on the basis that the rate would drop progressively over 20 years on the firm basis of a government backed contract, one has to wonder if there is nay recourse to law to prevent them going ahead with it.

They waste gazillions on totally inefficient wind, when this initiative offered all of us the ability to do our bit and despite what you might have heard on the news last night, modern systems are photovoltaic which means they work from light regardless of sun and are quite efficient, certainly compared to wind.

It’s just another example of imbeciles in government not having the first idea.

We pay the bloody French up to 80p per unit I understand so paying Brits 40p didn’t seem like a bad idea..

The problem has arisen with chancers operating fields of the bloody things.

Er yes I did install some last year and haven’t got much of a return yet..

despite what you might have heard on the news last night, modern systems are photovoltaic which means they work from light regardless of sun

Which is why they should only be fitted on south facing roofs, with unobstructed views of the sun, isn’t it?
I think current contracts will be OK, just knewly signed contracts which seems like a perfectly logical thing to do IMHO. And anyone worth their salt would have worked that out for themselves.

I think it still stacks up reasonable well at 21p/unit.

We’ll have to see what happens to panel prices though.

Can some one get me up to speed on this as my mum is talking about blowing 8 grand on some solar panals. Seems crazy to me given the fact that here electricity bill for a year cant be more than £500.

I’d not bother, chances are the company she uses won’t be around in 12 months time and any problems with the kit could be a ‘mare to sort.

FIT cut inevitable – yes
FIT cut Dec 8th instead of April 2012 – rumour with little basis in fact
FIT cut to 21p – rumour with some basis in fact

FIT cuts will only apply to new entrants to the scheme. Those with systems already installed will continue to benefit from the current 43.3p index linked rate.

Which is why they should only be fitted on south facing roofs, with unobstructed views of the sun, isn’t it?

Ideally yes. In practice anything between east and west gives good returns.

Industry is currently wondering what the hell is happening, not helped by rampant rumours and supposition and piss poor reporting by the moronic press.

Cuts to the FIT are indeed necessary to sustain the industry long term. However, too deep and fast cuts by a government that excels in bell-endery will kill the only real growth sector in the UK overnight. This is a real danger. Companies who have invested thousands in staff, training and equipment will really struggle to keep afloat as they find orders cancelled left right and centre, leaving them with a warehouse full of suddenly overpriced, unsaleable kit. It will be the smaller PV companies that will survive – those that can stay competitive due to lower stock holdings and overheads and a greater ability to adapt to a very different future. I hope so anyway, because I’m one of them.

On the plus side, the rent-a-roofers and cowboy installers that have given the industry a bad name will be wiped out over night.

Companies who have invested thousands in staff, training and equipment will really struggle to keep afloat as they find orders cancelled left right and centre, leaving them with a warehouse full of suddenly overpriced,

Which really means that without the govt subsidies it’s simply not competitive or viable, any business is going to do well if the govt pays the customer to use it. This was a discussion I had with Iberdrola, in Spain, about 8 or so years ago as I couldn’t understand why solar technology wasn’t more widespread in a country with 300+ days of sunshine. Not really a growth industry, is it either? The jobs never really existed, did they? As it’s all built on subsidies.
My question was that if the pv panels aren’t dependant on sunlight, why can’t I have them on a north facing roof? It’s not as if we have that much sunlight anyway, is it?

Thanks for that wonderfully enlightening post. I’m sure all the soon to be unemployed PV installers will be delighted to know their jobs didn’t really exist.

You can fit on a north facing roof if you want.

I’m sure all the soon to be unemployed PV installers will be delighted to know their jobs didn’t really exist.

I’m sorry if the truth hurts, it’s exactly the same as all the other poor sods who’ve lost their jobs because of the credit crunch. I’d be very happy if my customers could receive extra money for buying my products and/or a lump sum for buying in the first place. They were being paid by the govt and not the customer and now they’re going to learn what happens when the customer has to pay something closer to a realistic price. What are you worried about as you say it’s the rent a roof boys and those who’ve gambled too much who’ll suffer and as a small company you’ll be alright? 😉

Don Simon – the government wasn’t subsiding them because the utility pay the FIT price for electricity and pass it on through our bills, so we are paying it in proportion to our electricity usage so the cost is probably borne by the poorest disproportionately. Unfortunately, the FIT level was initially set too high thus creating a bubble – and who was the minister responsible – Ed Milliband.

Don Simon, you’re missing the point a bit.

Pulling the rug from beneath the industry overnight will create one big mess that could be easily avoided.

Don Simon – the government wasn’t subsiding them because the utility pay the FIT price for electricity and pass it on through our bills,

Either way, the govt or the utility companies, it was still creating a false industry and I’m not sorry to see the reduction in fit, the only difference on source of subsidy is that either the whole population pays through taxation or utility customers pay for it through inflated prices.
While the rug being pulled will be messy for some, is that going to be better or worse than the long term screw up after providing people with energy making equipment that probably won’t pay for itself. It’s quite ludicrous to support a business that is only sustainable through subsidies.

DS – I don’t disagree just pointing out the subsidy doesn’t come out of general taxation which is progressive as opposed to utility bills which is regressive.

The point that no one is disputing the need for a cut in FITs. They were due in April. Companies planned for it and business plans were built around it. Now we are told, out of the blue, it may happen in around a month’s time.

I know what you’re saying mefty. 😛
What I do know is that it’s a very difficult investment to justify in the UK without someone paying subsidies in the current climate of high energy prices.
Dudie, I’m not anti-PV, I’m not too happy with the subsidies that have helped keep a not very good business afloat and am happy to see them come down, I’m sure you’ll all survive as the payback time is increasing from 10 to 18 years, so still opportunity for people to make more money rather than simply reduce emissions.

modern systems are photovoltaic which means they work from light regardless of sun and are quite efficient

Pray tell what physics-defying slabs of solidified snake oil have you got hold of?

the only real growth sector in the UK overnight

Something so utterly dependent upon subsidies isn’t really a solid growth sector for the future.

Without direct sunlight you won’t get much production at all. In the summer production in negligible until direct sunlight reaches the panels then prodction rises as the angle of incidence improves.

When you take into account the real cost of nuclear (including recycling storage, decommissioning and the odd accident) and fossil (many cities being under water in a couple of hundred years time) then solar is cheap energy.

If EDF charges you 80p and pays me 60 euro cents then everybody wins. Your computer keeps running, EDF makes money and so do I.