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Observer Ethical awards Winners 2011

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Feed-in tariff cuts too deep and too fast says industry

Posted by Cathy Debenham on 10 November 2011 at 8:10 am

The feed-in tariff cuts are "too deep and too fast", say 90% of respondents to a survey circulated to solar PV companies by the Renewable Energy Association and the Solar Trade Association.

The survey, which was answered by 139 companies, found that employment levels in the solar industry could fall by 42% as a result of the cuts, with a third of companies forced to close. REA estimates that 25-30,000 people are employed in the sector - which would mean job losses of 10,500 - 12,600. The biggest sectors responding to the survey was from companies dealing with domestic own-funded installations, and commercial roof schemes.

98% of the companies questioned are alarmed by the government's treatment of the solar industry, which has been one of the few sectors to grow over the past year. They agreed with the statement: "DECC ministers have had plenty of time to iron out their issues with the scheme - the lack of sensitivity to the industry's needs for transparency, longevity and certainty is alarming."

Comments from respondents reinforced the strong disappointment that industry feels:

“blatant disregard for a growing industry that has taken up some of the slack from the failed construction industry. No time to adjust or mitigate crippling consequences.”

“Why didn't they review the whole fit tariffs in the summer when they capped the large scales? Why now? Why only 6 weeks? And they want us now to invest in RHI and Green Deal?”

“Absolutely unbelievable in terms of timescale and lack of understanding of the impacts on one of the few growth areas for business in really difficult market conditions”

“It was extremely disappointing that DECC did not listen to the industry during the first review when we recommended reducing ALL rates, not just the larger system sizes (>50kWp)”

“the measures will effectively cripple the PV industry, lead to further unemployment and will leave the country with even more dependency on the big 6 utilities and their ability to raise energy prices at will.”

The sector likely to suffer most from the feed-in tariff cuts is social housing with just 1,441 projects still deemed viable, and an estimated 31,552 likely to be cancelled. The more detailed answers on this section were too diverse to quantify, but estimates of the cost of cancellations varied from minimal to £millions. Costs incurred include stock cancellations, redundancy payments, site surveys, financing fees, DNO negotiation costs - and this doesn't include the costs to the customers.

Photo by living off grid

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