Feed in TariffIn the past few days the coalition government, and more in particular the Department of Energy and Climate Change have publicised that the available Feed in Tariff rates which reward, inter alia, generaters of solar electricity will be dramatically reduced. Prior to this announcement consumers and solar panel installers had been pulled into taking advantage of this revolutionary as well as green power source by way of the astoundingly lucrative rates being offered: a normal house could expect to collect 43p for every unit of solar electricity generated as well as 3p for each unit exported to the national grid. This did mean that the average monetary advantages of a residence which has a solar panel installation amounted close to £1700 on a yearly basis. With the planned modifications, that are being brought in many months prior to when originally planned, the rates are going to decrease, and numerous people that had envisioned their installations to be concluded prior to the new rates kicked in are now going through severe disappointment. Consumers along with solar panel installers alike therefore are in a state of confusion and shock, since the announcement arrived out of nowhere. Numerous deals for installations have already been entered into to be carried out before the March deadline day, yet now, they will all be lost. Consumers will certainly feel scammed and the solar panel industry will have a much harder job on their hands. Since the industry employs around twenty-five,000 people based on a number of estimates, the likely repercussions of this decision are extremely significant.

Responding to these astonishing governmental proposals a group of leading solar PV companies plan to start court proceedings to obtain an interim injunction, whilst friends of the earth are set to apply for judicial review. They both hope not necessarily to avoid a decrease in the Feed in Tariff rates, but to quash the decision that the new rates will apply from December of this year rather than March of the coming year. This will let them move forward with contracts which were legally entered into, avoid disappointing thousands of consumers and avoid the risk this kind of rash move could do to solar panel installation businesses as well as their employees could be subject to.

Reduced Feed in Tariffs for solar panel installations: it’s not all awful news

Whilst it would be challenging to argue that the manner in which the government has gone about announcing and implementing these proposals has been by any means reasonable, the substance is probably not as cataclysmically bad as people first think. Yes the feed in tariff rates have been diminished, and yes the boom time of solar panel installation might well see a small decline, but will it completely stop? The answer to this in my view is really a resounding no. The rationale behind cutting the Feed in Tariff rates is the fact that as the industry expands and demand heightens, so will the availability of crucial elements to solar panel installations. As a consequence these components become less expensive. If the Feed in Tariff were to remain the exact same whilst the cost for the solar panel installation went down, this would not reflect market tendencies.

Because of this, the return of investment available just before the proposed adjustments come into effect could possibly return in the future as the price tag of solar panel installations decreases proportionately. There might well be a few months of lag, but the death of the solar panel industry is not necessarily nigh, whilst the wonderful returns available to customers will remain. Due to this fact whilst the legal challenges would be a pleasant blessing to the solar panel industry in the event that they succeeded, they just do not spell the end of the line.