Government admits feed-in tariff deadline could leave thousands short-changed
16 Nov, 2011
Written parliamentary response reveals around 32,000 existing solar installations have just six weeks to register for feed-in tariff scheme...
Climate minister Greg Barker has admitted that a number of households and businesses could see the feed-in tariff payments they receive cut by around 50 per cent, despite having installed solar panels ahead of the government's announcement that it was planning to change the scheme.
Barker confirmed in response to a written parliamentary question from Shadow Energy and Climate Change Secretary Caroline Flint that there were 32,023 sites at the end of October where small scale solar systems had been installed but had not yet registered for the feed-in tariff scheme.
Flint warned that the feed-in tariff registration process for new projects takes up to seven weeks, and that the likelihood is that some households and businesses that completed solar installations ahead of the launch of the government consultation on changes to the scheme will be unable to register for feed-in tariff payments until after 12 December when the proposed cuts to the incentives come into effect.
In response to a separate written question from Labour MP Jim Cunningham, Barker admitted that people who installed solar panels ahead of the government's announcement might be left with the new, lower feed-in tariff rate.
"We recognise, though, that some prospective feed-in tariff generators who have incurred or committed expenditure may not be able to complete their installations and submit their applications for feed-in tariffs before the proposed reference date," he said, adding that the fast track nature of the changes was justified in order to stop the scheme over spending.
He also argued that, even if households and businesses miss out on the current feed-in tariff rate, they will still enjoy attractive rates of returns despite the incentives being cut.
The government maintains that the proposed rate of 21p/kWh will deliver average installations returns of between 4.5 per cent and five per cent, below the five to eight per cent range originally intended for the scheme, but above current rates of returns for ISAs and other savings options.
Flint warned that thousands of people who had ordered solar installations anticipating the current feed-in tariff rates would now be left short-changed, and again called on the government to reconsider the pace and scale of its proposed cuts to incentives.
"It cannot be right that the government is hitting people who are trying to green their homes and cut their energy bills," she said. "The government's cuts to feed-in tariffs will hit families, put thousands of jobs at risk and destroy the solar industry. They must think again, revise their scheme and extend their tariff deadline."
Barker has previously criticised Flint for failing to deliver clear proposals on how Labour would reform the scheme and stop it from over spending.
The latest development comes a day after The Daily Telegraph reported that the government is considering "phasing in" the proposed cuts to feed-in tariff incentives to address a backlash from households that had ordered solar panels anticipating the higher rates of return.
However, any delay to the proposed cuts will be difficult to orchestrate as the government cannot officially change the proposed reforms until the consultation period is completed on 23 December.
Sourced from Business Green
By James Murray