In the past 7 days the coalition government, and more specifically the Department of Energy and Climate Change have declared that the available Feed in Tariff rates which reward, inter alia, makers of solar electricity will be substantially reduced. Prior to this announcement customers and solar panel installers had been attracted into taking advantage of this imaginative as well as eco-friendly energy source through the astoundingly lucrative rates on offer: a standard house could expect to collect 43p for each unit of solar electricity made in addition to 3p for every unit exported to the national grid. This did mean that the average fiscal benefits of a home having a solar panel installation came close to £1700 annually. With the planned modifications, that are being brought in many months sooner than originally planned, the rates are set to decrease, and many individuals who had envisioned their installations to be finished before the new rates kicked in are right now confronting severe discontent. Consumers in addition to solar panel installers alike are therefore in a condition of confusion and shock, as the announcement arrived out of nowhere. Numerous legal agreements for installations have been entered into to be carried out before the March deadline day, yet currently, they will all be lost. Consumers will feel totaly ripped off and also the solar panel sector will now have a considerably harder job on their hands. As the industry employs about 25,000 individuals based on a number of estimates, the probable repercussions of this decision are extremely far reaching.

In reply to these unexpected governmental plans a group of leading solar PV companies plan to begin court proceedings to obtain an interim injunction, whilst friends of the earth are set to submit an application for judicial review. They both wish not necessarily to stop a reduction in the Feed in Tariff rates, but to quash the decision that the brand-new rates will apply from December of this year as opposed to March of the coming year. This will permit them to continue with contracts that have been legally entered into, avoid disappointing thousands of customers and steer clear of the peril this kind of rash move could do to solar panel installation companies as well as their staff members could be subject to.

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

Whilst it would be very difficult to argue that the way in which the government has gone about announcing as well as implementing these proposals has been by any means fair, the substance is probably not as cataclysmically awful as people first think. Yes the feed in tariff rates have been decreased, and yes the boom time of solar panel installation may well see a small decline, but will it totally stop? The answer to this for me is a resounding no. The rationale behind changing the Feed in Tariff rates is that as the industry expands and demand improves, so will the availability of vital components to solar panel installations. As a result these components become less costly. If the Feed in Tariff were to remain the same whilst the price for the solar panel installation went down, this would not echo current market trends.

Therefore, the return of investment available before the proposed changes come into effect may well return in the future as the cost of solar panel installations decreases proportionately. There might well be several months of lag, but the death of the solar panel industry is certainly not nigh, whilst the superb returns available to consumers will remain. As a result whilst the legal challenges would be a welcome blessing to the solar panel industry in the event that they succeeded, they don't spell the end of the line.