The Centre for Alternative Technology expressed concern at government proposals to cut Feed-in Tariffs (FiTs) in half. The new reduced rate of 21p/ kWh will affect all photovoltaic installations below 4kW after 12th December 2011.
At the current FiT rate of 43.3p/kWh, an average 2.9kW system will generate an estimated £1,190 a year. Following the introduction of the proposed 21p rate, the same system will generate £640, extending the payback period of an £11,500 installation from 10 to 18 years. Other changes include linking FiTs to the energy efficiency of housing – new FiT installations will only be considered on housing with an energy efficiency rating of C or above. CAT experts believe that the speed and unpredictability of the cuts send out a damaging message for the growth of the green economy.
Information Officer Tobi Kellner said: "There is a history of schemes running out of funds (the Low Carbon Buildings Programme), being delayed for years (the Renewable Heat Incentive) or being very suddenly and dramatically cut (FiTs). This damages the growth of any green industry in the UK. Commitment to new sustainable technologies means significant investments, especially for small or medium- sized companies. Businesses can’t afford to have the rug pulled out from under them. Furthermore, making energy efficiency a condition for receiving FiTs only makes sense if there are viable incentives for energy efficiency measures which are suitable for the large proportion of UK households who live in older buildings."
Currently any household can install solar panels and benefit from FiTs; the new measures could exclude up to two thirds of Britain’s housing. "Linking FiTs to energy efficiency is a good idea but the government must also back that up by making energy efficiency measures financially viable for the majority of UK households," says Tobi Kellner.