Thursday, 3 November 2011

Solar Industry Threatened By UK Government Cuts

The speed of the UK Government's proposed cuts to feed in tariffs (FITs) for solar panels will be a body blow to a sector in which many businesses have invested heavily in the last few years, says Energy Minister Fergus Ewing.

The proposed cut will more than halve the amount of money owners of solar panels get for supplying electricity to the grid - from 43.3p per kilowatt hour to 21p per kilowatt hour.

And the speed of the changes - which will be implemented in just six weeks - means businesses will have no time to make plans to deal with the change, which will affect projects already on their order books.

The industry is growing rapidly in Scotland, with over 1,300 installations in September alone.

The cuts will have a significant impact on social housing projects underway in Scotland which have been designed to provide low-income tenants with free electricity to help tackle fuel poverty. For example, Glasgow Housing Association has signed a contract for installations on 500 homes and Dundee City Council has started a tender process for 1,000 homes. These projects could be stopped in their tracks.

Mr Ewing has written to Chris Huhne, the Secretary of State for Energy and Climate Change, to express his concerns about changes to the FIT.

Mr Ewing said:

"Cutting the feed in tariff so sharply and with so little warning will have a devastating impact on families and businesses across Scotland.

"This change will be a body blow both to the blossoming Scottish solar industry, and to thousands of households across Scotland who will lose their chance to escape from fuel poverty.

"Companies with full order books, who have invested in recruiting and training new staff, including many I have visited in the past few months, will find the carpet pulled from under them, as the numbers on which they have based their business plans are changed, suddenly and without warning.

"Families in social housing who were expecting to be able to live without dreading their electricity bill will be deeply affected by this change.

"I urge Chris Huhne to reconsider both the speed of these cuts and how he will prevent those in most need being hit the most."
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