Feed in-Tariff subsidies will suffer a 50% from 1 April 2012, the Government announced this month.

The decision has been met with fury from the industry, and spells the end for many projects not already underway, causing solar companies to lose money. But what has caused more irk, however, is the imposition of a deadline for solar registration closing on 12 December, before the end of the consultation on 23 December.

The Government says the reduction in subsidies is being proposed to “avoid boom and  bust”, and have been left with “no option” but to open the reduced tariffs for consultaiton. The proposals, subject to consultation, would introduce a new tariff for schemes up to 4kW in size of 21p/kWh – down from the current 43.3p/kWh. Rates are also to be reduced for schemes between 4kW and 250kW.

Climate change and energy minister Greg Barker said: “The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.”

At the time of the announcement, Michelle Davies, partner and head of Evershed’s clean energy and sustainability group said: “The Department of Energy and Climate Change has given developers and investors six weeks to attain accreditation but many projects are operating within delivery timetables (for panels) of eight weeks, thereby removing the ability entirely for them to protect sums already invested.”

A letter to The Guardian from Alan Sharpe, director of finance at RSPB echoes these concerns.

“It is worrying to hear the Government’s proposal to savagely reduce subsidies for solar power… Existing subsidies may be too high, but that does not excuse the proposal to make such large changes at short notice – indeed, before consultation has even ended. “

Mr Sharpe added that RSPB’s own solar programmes to install panels on car parks and 22 of its nature reserve roofs have been cancelled, resulting in a loss of investment.

According to DECC, the cost of the average domestic solar PV installation has fallen by at least 30% since the start of the scheme in April 2010 – from £13,000 to around £9,00

DECC reports that if no change was made to FITs, by 2014-2015, solar PV would cost consumers around £980m a year and add around £26 (2010 prices) to annual domestic energy bills in 2020. The new proposals will reportedly restrict solar PV costs to between £250-£280m in 2014-15.

http://www.decc.gov.uk/en/content/cms/news/pn11_091/pn11_091.aspx