Harsh cuts to subsidised tariffs for solar power could destroy the sector, Building reported.
Providers have warned that the government-subsidised Feed In Tariff for solar power must not go below 28p per kWh to avoid killing consumer demand.
The Feed In Tariff (FIT) dictates the amount paid to home owners with solar panels for each kWh of electricity they generate and feed back into the National Grid.
The government is due to announce its plans for the FIT level imminently and energy minister Greg Barker has said the tariffs will definitely see a cut to help balance the UK’s finances.
The government plans to slash the rate to 20p kWh, the Financial Times reported. But Damien Green, chief executive of solar panel installers HomeSun, said FIT needed to be retained at a minimum of 28p for the next financial year at least or the sector would be devastated.
Since the introduction of FITs, 25,000 jobs have been created and over 3,000 enterprises started.
Chris Hopkins, managing director of roofers and solar panel specialists Ploughcroft Group and member of the government’s Green Construction Board, said anything below 27p would see companies slashing jobs as consumer demand would collapse.
But he said some level of cut in the FIT was tolerable. “A cut to 27 or 28p per kWh would not be a massive blow. I would say the companies that are working on tight margins will probably cease to exist but the good quality companies which understand renewable energy will be OK. For every pence below that level it has a more dramatic effect,” he said.
In a separate story Construction News reported that the industry is calling on the government to avert ‘disaster’ over the Green Deal as the government prepares to launch its Green Deal consultation document, expected out next week.
Construction firms are still awaiting clarity over a number of issues including accreditation, financing and market take-up with the document thought unlikely to include financial incentives on VAT reductions or stamp duty.
Electrical Contractors Association head of environment Paul Reeve said one area he was particularly concerned about is that extra certification will be added to the existing qualification landscape.
