MERSEYSIDE renewable energy firms have reacted with shock to the news the Government is to slash subsidies for domestic solar panel installations.
The widely-expected cut, which ministers say is necessary to make small-scale renewable subsidies sustainable, but which the industry warns could seriously damage growth and jobs, would come in for panels installed from December 12.
The feed-in tariffs scheme was launched last year and it meant that householders installing solar panels would be paid for the electricity they generate.
However, the scheme has proved more popular than anticipated, so now the amount people are paid for their energy is to be cut from 43.3p per kWh to 21p per kWh.
The Government says the cut is necessary, as, without action to control the situation, solar electricity would cost £980m – or £26 extra on the average household electricity bill.
However, companies in Merseyside who have prospered thanks to the success of feed-in tariffs now believe the rug is being pulled from under them.
The industry is warning the cut could costs thousands of jobs across the UK.
Eco Environments, founded in Bootle, is one such firm, and is rapidly expanding across the country.
Director David Hunt told LDP Business: “We do not dispute that the feed-in-tariffs should be reduced, but to a sensible level. Slashing the payments by 51% is the economics of the madhouse.
“The Government claims that the announcement is intended to provide the solar industry with a clear and sustainable growth path, avoiding boom and bust, but its proposals will cause exactly that.
“Companies such as our own, offering a comprehensive range of renewable energy technologies, will be OK in the long-term, but there are many companies dependent solely on solar power which will now go to the wall, along with tens of thousands of jobs.”
Peter Bladen, managing director of Halsall-based solar panel firm BSOLAR, added: “The Government’s announcement that it will slash the rates by more than 50%, and that this will come into effect in December, has taken many by surprise.
“Firms which have won sizeable contracts for early next year are now seeing these contracts at risk, because the financial incentives have been cut.Š
“The new rules are also hitting the ordinary householder that was looking to generate some income from green technology.”
Environmental charity Groundwork Merseyside acknowledged reform of the scheme was needed, but said the changes may have gone too far.
Spokesman Tony Seasman said: “While the feed-in tariff has boosted growth in solar installation, it has also provided a bewildering range of offers and encouraged less reputable installers to prosper.
“However, these changes will cut deeply into jobs, sales and prosperity for reputable installers and ultimately affect the long-term sustainable impact of economically sound environmental improvements.”
