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Feed-in Tariff cuts create Green Deal scare

Contractors hit by the cut to the Feed-in Tariff have warned they are much less likely to invest in preparation for the forthcoming Green Deal initiative.

Senior figures said the industry would be wary of setting itself up for another fall by spending in anticipation of other government sustainability schemes.

The Green Deal, which will offer loans for energy efficiency measures, is set to begin operating in October 2012.

Several contractors have cited problems caused by plans to slash the tariff householders receive for energy produced from solar panels.

The current tariff ends next week on 12 December, and a consultation on proposals to introduce a lower rate concludes 11 days later.

The government has proposed cutting the tariff for generating up to 50 kW by around half. Clarification on the new rates is not expected until next year.

Mears decided to withdraw from the solar photovoltaic market in the wake of the cuts, leaving it to write off £2 million it had spent on site set-up, system design and installation.

Executive director Alan Long told CN that the industry would not rush into making such investments in renewables again.

“There will be hesitance to take investment decisions until the Green Deal framework is clear,” he said.

Electrical Contractors’ Association head of environment Paul Reeve said the government had damaged the drive for sustainable construction.

“The way the Department for Energy and Climate Change has handled the Feed-in Tariff has worked against confidence in any green measures to be brought in over the next couple of years,” he said. “Everyone will be much more cautious.”

He added: “Small businesses have tooled up, got their business plans right and then at incredibly short notice the rug has been pulled from under them. The industry did not deserve this.”

Carillion last week put 4,500 staff at risk of redundancy, saying the proposed cut in the tariff would reduce the market for solar “significantly”.
It is understood that up to 1,500 jobs could go as the company restructures in the wake of the cut.

A spokesman said the firm would continue to prepare for the Green Deal. “But of all the market drivers, only one is legislation. The biggest is energy prices,” he added.

 

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