Consultation on Feed In Tariffs Cut - Positive News

*TODAY'S ANNOUNCEMENT IS A CONSULTATION WITH INDUSTRY RESPONSES DUE BY 23RD DECEMBER - THESE RESPONSES WILL THEN BE USED TO DETERMINE CUT AND DATE IMPLEMENTED BY*

Greg Barker today announced the anticipated *proposed reduction in the Feed In Tariffs for Renewable Electricity generation. Many in the industry have treated this as bad news which could be expected from any cut, however many forward thinking people within the renewable sector are able to see the short and long term positive impacts that this will have for; Small Installers & Solar PV Manufacturers.

What are the positives?

The main aim of this cut is to push more work to the smaller MCS Installers as installations will undoubtedly become more affordable as PV Equipment prices continue to fall. Small installers are expected to see even more installations as householders who could previously not afford the initial capital costs will be be more able to as prices now continue to fall. There is still a 5% rate of return and slightly higher payback period, based on equipment prices not falling any further. So homeowners get a 25 year guaranteed return at 5% based on no further cuts on PV equipment - which won't be the case.

The Green Deal set to come to fruition in 2012 will mean homeowners are subsidised to make energy improvements including Solar PV, by which time equipment costs will be even lower and more homeowners will be able to access.

The Feed in Tariffs have in effect received protection from being removed altogether in today's announcement unlike some parts of Europe. Many thought that the DECC would cut the FIT's altogether as will one day happen, however this cut safeguards the industry as installations will continue and work will last much longer although be it pushed towards the smaller installers.

There will also be reduced competition for Smaller installers from Free PV Schemes & Larger installers who won't be making super-normal profits to warrant their attention to the industry.

Overall the smaller installer can expect to see more installations as costs of installations fall, longevity of work as the Feed In Tariffs have in effect received protection, reduced competition from larger installers who will be forced out of the market & Free PV schemes and further installations when the Green Deal begins in 2012.

The main talking point of the announcement has been the proposed reduction of reducing the main level of Feed In Tariff from 41.3p to 21p. This *proposed cut is due to the fact the Solar PV equipment prices have reduced dramatically over the last 1-2 years meaning that a lower subsidy is required to supplement the installation cost. For installations prior to 12th December, the full Feed In Tariff will remain for 25 years. After this date installations will receive the higher tariff until April 2012 and then move onto the lower tariff currently *proposed at 21p.

The full DECC Consultation document is available at http://www.decc.gov.uk/assets/decc/1...tation-doc.pdf

Responses are needed by 23rd December and as document states will be used to look at the Rate Changes and Date effective by.

ClickGreen are also generating support for the Solar Industry repsonse here http://www.clickgreen.org.uk/news/na...lar-rates.html

Greg Barker Speaking at Solar Power UK Exhibition