Minister confirms feed-in tariffs will be cut
Homeowners wanting to fit solar panels to power their homes and benefit from payments for feeding electricity into the national grid will have to ensure their homes meet minimum standards for energy efficiency, energy minister Greg Barker announced today.
He said the new requirements would encourage solar panel fitters to diversify into other energy saving initiatives and bring more work to the construction industry.
Speaking at the Solar Power UK conference in Birmingham, Barker said: “We will be bringing forward proposals to ensure that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards.
“This will encourage companies like yours to diversify into new sectors and join the transformation of the energy efficiency market with the same gusto as you have microgeneration,” he added.
But Barker also said there would have to be cuts to the subsidised rate that people receive for feeding their surplus electricity from solar power into the national grid.
He said: “The subsidised returns we have seen on solar panel investments - funded from consumer energy bills - are unsustainable at a time when National Savings have pulled their index linked bonds, interest on savings accounts has plummeted and the stock market has dropped.”
The government is expected to announce a reduction in the feed-in tariffs paid to homeowners and business for their surplus electricity in the next few days.
Today, the Financial Times reported the tariff could be slashed by the department for energy and climate change from 43p per kWh to 20p per kWh.
Industry leaders have warned a cut in solar power subsidies for home owners could be disastrous for the industry and see businesses close.
Brian Berry, director of external affairs at the FMB, told Building: “It would be a serious concern unless it was replaced with something else. Quite a lot of smaller businesses have put a lot of investment into this. If tariffs are cut it becomes less attractive to customers and that will reduce demand.”
Berry said that any funding cut from the micro generation programme should be used to further incentivise the forthcoming Green Deal.
Paul Reeve, head of safety and environment at the Electrical Contractors Association, said: ““People only install photovoltaic panels if the sums clearly add up. A big cut in FITs could stall the domestic installation market, even if it looks marginally feasible on paper. If this is over-done it could destroy the prospects of thousands of small businesses at a time when unemployment is rising.”
But Barker told the conference he wanted to work with the industry to agree a sustainable level for feed-in tariffs.
“Being sensible with tariffs means there will be more money to go round, to spread more widely and thus allow more people to benefit. In the long term this should mean more customers for your companies, not fewer. It should also mean more interest in your products and the solutions you provide and that are on show here today and more opportunities for diversification,” he said.