The government has confirmed it is planning to slash solar incentives by more than 50%, cutting the feed-in tariffs available to domestic & small-scale business installations, from 43p per kWh to just 21p per kWh. The Department of Energy and Climate Change (DECC) today launched a consultation on the proposed changes, confirming it wants the reduced tariffs to come into force as early as 12 December. Under the proposals the new tariffs would apply to all new solar PV installations with an eligibility date on or after 12 December 2011. Such installations would then receive the current tariff before moving to the lower tariffs on 1 April 2012, assuming the government does not make further changes following the closure of the consultation on 23 Dec. The timeline prompted criticism from the solar industry, with founder of Solarcentury Jeremy Leggett stating on Twitter: "So you 'consult' until 23 Dec but cut off tariff from 12th? I guess you have a good lawyer?" The proposed changes are largely in line with those that appeared in a document inadvertently published by the Energy Saving Trust on Friday. If brought into effect they would cut rates of return for solar installations from current levels that have, in some cases, topped 10% to just 4.5% to 5%. Significantly, the returns would be below the 5-8% originally envisaged by the feed-in tariff scheme. The consultation also proposes cuts of between 14-55.5% for larger installations with between 4kW and 250kW of capacity. The largest cuts of more than 55% are reserved for installations with 4-10kW of capacity, while larger installations with 150-250kW capacity that are typically favoured by businesses & community projects will see tariffs fall from 15p/kWh to 12.9p/kWh. Industry experts have warned the deep cuts would lead to a severe contraction in demand & an end to free solar financing schemes & social housing projects. Leading solar firms are predicting significant job losses if the proposed changes come into effect & are promising to mount a high-profile campaign against the scale of the cuts & the rapid pace at which they are expected to come into effect. There are also rumours that some solar firms could pursue legal action against the government over the rapid timeline for the consultation & the manner in which the proposed cuts could come into effect before the consultation exercise is officially completed in late December. However, climate minister Greg Barker insisted the deep cuts were essential to ensure the feed-in tariff scheme remains within its spending cap and provides more "sustainable" foundations for the UK's solar industry.
