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This month saw the current government make a drastic u-turn in its support for solar energy. Days after Greg Barkers supporting speech at the UK Solar conference in Birmingham the government announced it is to cut Feed In Tariffs by over 50%, but more controversially bring the cut off date forward to the 12th December.
The cuts themselves fall in line with the drop in product and installation costs. Panels account for a large percentage of the cost and have been steadily dropping since the Feed In Tarrif was introduced. This along with more competition in the marketplace has brought the cost of the systems down. Moving forward manufacturers and suppliers will have to lower margins and installers tighten their belts. Doing this will still certainly achieve viability for the PV installations, with payback in single figures still attainable. We also have to remember the rising energy prices and commercial requirements to cut CO2 emissions.
There will be alot of people greatly effected by these decisions though. The renewable sector is one of the UKs only booming industries at the minute and theses decisions will certainly lead to job cuts and businesses going under. Especially companies who concentrated on the Free PV, and social housing markets will be mostly affected.
So although I believe there is a still a future in the PV market, the 12th December deadline for registering current FITs I feel was too harsh. It sent the sector into a spin, with stories of Wholesalers shifting 2 months worth of stock in 2 days, installers working round the clock and prices going up to suit. This does not help businesses, how will they cope after this deadline? The market will certainly drop off for a couple of months and redundancys will be certain. Although a regulated industry, installs are now going in at such a pace and by new inexperienced installers drafted in to cope with the demand, there is no way to monitor them. This has to be a worry for the consumers.
Next month I will give an update on how PV will still be viable for businesses and the consumer.
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