The importance of stability and a firm footing

Without wishing to over dramatise, I’ve had a weird experience this week that has literally stopped me in my tracks!  I had a foot operation which has left me with the prospect of hobbling around on crutches for the next 8-10 weeks.  It was planned so I knew what was coming.  I had it in mind that I would be back in the office Monday with my leg propped up on a chair and it would be back to business as usual.  Oh no, how naïve can one be!  I had no idea at all just how difficult life would be on one foot!  Nothing is simple, everything takes 3 times as long I hop around rather amateurishly on my crutches (it’s not a pretty sight!) and being off-balance makes everything hurt as muscles I didn’t know I had suddenly have to support me.  It doesn’t make for an efficient working day!  Anyway, what’s all this got to do with Solar I here you say?  You’d be forgiven for thinking the painkillers have got to me a little and I’m rambling deliriously.

Well, my predicament got me thinking about the rough ride the UK Solar market has suffered in the last 6 months with the sudden changes in Government policy and the subsequent months of uncertainty which have without a doubt damaged consumer confidence.  The industry was literally knocked off its feet and has been struggling to regain stability in the market ever since.  It’s been trying to find it’s balance, much like me, without the stabilising effect of clear government policy.

But, after months of uncertainty the Department of Energy and Climate Change (DECC) finally announced last week the results of the consultation on Solar Feed-in tariffs. Here’s a brief overview of the changes which will come into effect from 1st August 2012:

  • Generation  Tariff for systems up to 4kWp (domestic size) will be 16p / kWh (currently 21p). 
  • Export Tariff will increase from 3.1p / kWh to 4.5p / kWh
  • Feed-in Tariffs will now be guaranteed for 20 years rather than the current 25 years.
  • Tariffs will still be index linked to RPI
  • Future Tariff reductions will be quarterly at a rate of 3.5% and will be linked to deployment i.e. if the market slows beyond certain thresholds, reductions may be delayed.

Greg Barker in his statement to Parliament said: “I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

The new tariffs will deliver a return on investment of around 6% for domestic/small commercial installations and up to 8% for larger systems which is in line with how the scheme was initially set up in April 2010.  I think this is good news for the Solar industry in that we finally have clarity and a subsidy scheme that we can work with for the long term. I believe it will bring stability back to the industry and we can be very clear with our customers and in our marketing what the returns are going to be.  Sure for those who were only motivated by the financial returns, it’s not as good as it was, but there are plenty of people out there who see beyond the money making scheme and see how free Solar energy will play an important part in our future.

Every business needs a secure footing from which to operate and I’m excited by the prospects for Solar Energy in the UK now!  If you know anyone who has been put off Solar by all the negative media reports, tell them to give me a call.  I’ll give them an honest, up-to-date view on how Solar could work for them.