Solar PV Industry relief as FIT cuts are shallower than expected

The government are poised to dramatically cut the Feed in Tariff subsidy (FIT) in an attempt to cool down the rapid growth in domestic solar installations across the UK.  

Whilst the FIT subsidy exists to drive the growth of all forms of renewable energy production, approximately 97% of all funding has been directed at the solar industry.

The original predictions by the Labour government, who initiated the scheme, suggested that 137MW of solar electricity would be generated in the first two years of the scheme. This figure has been nearly doubled in reality and with six months to spare!

This has sent alarm bells ringing in government and forced ministers and civil servants to reappraise this particular part of the FIT Scheme.

Therefore, Greg Barker, Climate Change Minister is about to announce that the government are to reduce the subsidy to small scale energy producers from 43p per Kwh to around 20p per Kwh.

Recognising the potential to decimate the newly flourishing solar industry, Barker commented at a solar power conference in Birmingham “ We are determined not just to drive down carbon emissions but to build a successful, thriving, prosperous low carbon economy” and went on "I haven't come here to kill off the tariff scheme, I want to fix it, enhance it and put the whole industry on a sustainable, credible economic path to a bright and exciting future."

With the realisation of the solar industry that a cut was imminent, there has been more than a whiff of relief as the planned tariff cuts seem not to be as deep as expected.  With a dramatic reduction in equipment costs over the last few years, solar suppliers remain upbeat that the industry can still flourish.

For more on changes to FITs go to http://www.guardian.co.uk/environment/2011/oct/27/solar-subsidy-cuts-community-schemes?newsfeed=true