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Businesses and campaigners angered over solar power tariff cuts

 

Business organisations, consumers and environmental campaigners will be lobbying Parliament this week to protest at the Government’s decision to cut financial support for solar power by half within weeks.

The Feed in Tariff (FiT) scheme has been a major incentive in getting more businesses and homeowners to install solar power, as well as attracting significant investment in solar farms and helping to grow the solar power industry. In fact the incentives have proved almost too popular, and with the cost of solar panels also falling significantly, many expected the Government to reduce the FiT available on smaller projects.

Writing in the latest edition of the Bird Luckin Briefing published earlier this month, Savills agribusiness expert Ben Makowiecki said that many people expected a cut in the FiT of between 10% and 25%, to take effect from 1 April 2012. To view this article, follow this link (see page 3). But the recent announcement that the FiT tariff will be more than halved – from 41.3p to 21p – and will apply to all installations after 12 December this year has angered many of those involved in the solar industry, as well as environmental campaigners and those looking to switch to alternative energy.

The proposed new tariff, announced despite the fact that a consultation on the issue will not finish until 23 December, will mean that householders and small businesses will see the payback period for investing in solar panels almost doubled; someone installing £10-12,000 solar panels will only be in credit after 18 years rather than 10. The move has also prompted warnings that the alternative energy sector in the UK could be derailed by unexpected changes, with the loss of thousands of jobs.

Speaking at a recent event John Cridland, CBI Director-General said the move was “the latest in a long line of Government own goals”. “The low-carbon sector has been growing across the world throughout the recession. We need to expand our share,” said Mr Cridland. “But the Government has announced a dramatic cut in the solar feed-in tariff. A reduction was already on the cards from 1 April, but this will now come in by mid-December – before the consultation has even ended. “Moving the goal posts doesn’t just destroy projects and jobs, it creates a mood of uncertainty that puts off investors and they wonder what's coming next.”

Federation of Small Businesses (FSB) chairman John Walker believes it will be the SMEs in the sector who are hit hardest by the changes: “The Government’s ill-thought through policy has left small businesses high and dry – unable to stock up on equipment necessary to meet pre-agreed orders and benefit from the increased demand for solar PV ahead of the cuts to the FiT scheme,” said Mr Walker. “This is simply because big businesses have mass purchased ahead of the 12 December deadline. The Government should be building on public appetite for renewable energy, and maintain certainty in the market that allows firms and consumers to plan ahead. The constant tinkering with the FiT scheme has undermined investor confidence across the green energy sector. Small firms in the green economy now lack the confidence to plan for the future.”

Alternative energy campaigning body Our Solar Future is organising a mass lobby of Parliament on Tuesday (November 22), to try to prevent such major cuts being introduced in such a short timescale. 

Peter Warren
t: 01245 254250
e: peterwarren@bird-luckin.co.uk