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FiT cut axes PV budgets
WITH talk of cuts to local authority PV schemes amounting to millions of pounds in the East Midlands, the impact of the proposed cut in the Feed-in Tariff rate was brought into sharp relief at the latest event held by the Greentech Business Network.
Pete Smith, MD of Efficiency East Midlands, a new not-for-profit company set up to negotiate procurement contracts for local authorities and housing associations, said that DECC’s intention to reduce the subsidy by half had already caused regional councils to shelve £15m worth of planned work on social housing PV schemes. Another £4m has been cut from an existing £20m programme because of the new deadline for installation. “I understand that some installers think the reduction is good because it makes the business more sustainable but my opinion is that it’s happening too quickly and too harshly,” he said. “We would like to see a stepped approach.”
Mr Smith was speaking at an event that was partly designed to examine the impact of the FiT reduction on public housing and procurement supply chains. The other speakers at the event, held at BioCity, were Tim Saunders, of the Energy Saving Trust, and Jerome Baddley, of Nottingham Energy Partnership.
Minister Greg Barker’s announcement that small PV payment rates would be cut from 43pkW/h to 21kW/h, with a December 12 deadline for new schemes to qualify for the bigger rate, has had a predictably massive impact on the young solar industry. Some private sector installation companies have protested that the reduction will stop the industry in its tracks and lead to the loss of 25,000 jobs. Some 700 industry supporters made this point strongly last month when they mounted a ‘Cut don’t Kill’ protest at Westminster (you can see more on this campaign at http://www.oursolarfuture.org.uk/).
The impact on public sector PV schemes has also been dramatic, with public sector housing managers racing to finish large-scale PV installation schemes months ahead of deadline. Such has been the case in Nottingham, where Nottingham City Homes has been managing an £8.5m scheme to install panels on 1,450 homes across the city. The work was supposed to be completed in March 2012 – not December 2011. In the event, around 1,300 homes were installed and registered by December 12. Panels could not be installed on a proportion of homes because tenants who had earlier agreed to the work ended up refusing access.
But although this scheme was successful, the rate reduction has led to the abandonment or reduction of other public sector PV projects worth many millions of pounds – projects that would have led to the employment and training of local people and SMEs. However, it’s not all doom and gloom. As Tim Saunders pointed out, the £860m Renewable Heat Incentive began in November and in addition there is also the £12m Renewable Heat Premium Payment scheme that gives money to householders who buy renewable energy heating technology. This itself is a short-term scheme to bridge the gap before the Green Deal comes in next autumn. Mr Baddley said that the NHS in the East Midlands has an annual spend on goods and services of £3.5bn and if it was a state its current carbon footprint would put it at 137th place in the world – one above Afghanistan.
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