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Solar Business RIP

Chris Hurcombe
by Chris Hurcombe May 3, 2012

New figures from the Department of Energy & Climate Change suggest that the recent axing of subsidies for Solar Panel installation could threaten to put the renewable energy source in the shade.  The latest information from the Department of Energy & Climate Change (DECC) have shown a 90% fall in the amount of solar panel installations since 1st April, leaving question marks over the progressive nature of the solar industry in the UK.

Stemming from a 50% decrease in the available subsidies for homes and commercial properties who decide to install solar panels, the decision from the Coalition government has drawn much controversy – including a high court case – but the latest DCC figures could be the biggest talking point yet.

Previously, anyone installing solar panels would receive 43p/kWh of energy generated, but since the cuts have come into effect on 1st April, that has plummeted to 21p/kWh.

In the three weeks since the change in subsidy, an average of 2.4MW of solar photovoltaic capacity has been added each week – a huge 87% down from the weekly average for the previous year of 18MW.

This vast drop in the amount of panels installed per week is likely to be met with outcry from many of the changes’ opposition, who feared that the ‘too far, too fast’ change could cost could endanger thousands of jobs in the solar and clean commercial and domestic energy industries.

Greg Barker, the Conservative minister responsible for the solar subsidy scheme, said the problem isn’t with their cuts to subsidy, but instead with a ‘broken’ commercial electricity suppliers system put in place by the Labour government that preceded them.

Barker also said the more stable structure would ultimately put an end to “solar booms” and busts, and “bring in a much greater degree of certainty and predictability.” He has set an ambition to have 22GW of solar capacity installed in the UK by 2020.

Caroline Flint, the shadow energy and climate change secretary, claimed on Tuesday that this target would take 169 years to reach at the current rate. “For months Labour has been warning that the government’s cuts to solar power would destroy thousands of jobs, cut off a green hi-tech British industry and stop families controlling soaring energy bills.” adding that the DECC statistics were “Shocking” and commenting that it will new take “a staggering 169 years for us to reach our targets for solar power.”

Solar Trade Association chief Paul Barwell,  said: “We’ve seen drops in installation with every policy adjustment, but we expect this one will take a bit more time to pick up.” He said the reason take-up would take longer this time is the new requirement that homes must be reasonably energy-efficient before being entitled to solar panel subsidies – a requirement met by about half of homes.

“Many householders are aware that government has slashed subsidies,” Barwell added. “The challenge for us is to make householders aware that’s partly because industry has slashed costs, and partly because solar is so popular. There is no doubt that financially solar remains a great prospect for UK homeowners so there is no good reason why the UK market should stagnate.”

Interestingly all sides agree that the change in subsidy structure had to happen, as installations and maintenance of solar energy solutions have become considerably cheaper – the disagreement comes with the scale and speed of the cuts.

With so much to consider, would you rather we took the risk on another ‘solar bust’ to try and keep the amount of installations high?

Or do you think bringing the number of solar panels installed down to a more consistent rate now that installations are cheaper was the right thing to do.

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