Those with plans to install solar panels have been warned to act fast or reassess their plans this week following the government’s announcement that feed-in tariffs from solar will be slashed from next month. Earlier in the year, funding for large-scale projects was drastically cut, following an unexpectedly high uptake of solar schemes in the UK. image expired

The latest announcement by the Department of energy and Climate Change, which will this time target small-scale schemes, has been heavily criticised by industry representatives and environmental groups. Solar companies have warned that firms could go under and thousands of jobs will be lost as a result of the cuts. Some firms are already planning to lay off staff as early as this week according to Green Business weekly Green Wise.

Under to the new plans, feed-in Tariffs for the smallest installations (up to 4kW) could be more than halved and support for systems up to 250kW will also suffer cuts; the reduced feed-in tariffs will apply to all panels installed from 12th December this year.

The DECC said payments for existing installations will be unchanged; feed-in tariff rates will be fixed for 25 years for schemes with an eligibility date on or before 12th December. The NFU has criticised the announcement, saying farmers planning schemes will be unlikely to get them operational in time to meet the "excessively harsh" deadline.

The union’s renewable energy adviser Jonathan Scurlock urged farmers with a scheme in progress to "go back to the supplier and negotiate hard to get systems completed before 12 December in order to get the higher tariff."  

DECC attacked over ‘deep, sudden cuts’

Climate change and energy minister Greg Barker insisted the support cuts were necessary to prevent ‘boom and bust’ in the renewable sector. He said, "Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won't come as a surprise to many in the solar industry who themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year."

He continued, "My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust."

However, renewable companies and environmentalists have said the government’s plans will have the opposite effect. Since April 2010, when the feed-in tariff scheme was introduced, the number of jobs in the solar sector has swelled from 3,000 to 25,000; jobs which solar companies say the government’s cuts will jeopardise.

Donna Hume, spokesperson for Friends of the Earth, castigated the DECC for its decision, "The government has cast a dark shadow over our thriving solar industry - making such deep and sudden cuts to incentives could put tens of thousands out of work. Greg Barker says he wants to make subsidies fairer – but the new rates mean that unless you have significant savings, you’re unlikely to be able to afford solar panels."