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Tariffs review creates uncertainty

The government has been accused of causing chaos in the solar PV industry and may be facing a legal challenge to its fast-track review of feed-in tariffs.

A number of UK solar panel installers say they are reconsidering plans to invest in the market due to ongoing uncertainty surrounding the tariffs after the government brought forward a review of the scheme.

Energy secretary Chris Huhne launched a comprehensive review of feed-in tariffs on 7 February after more than 21,000 renewables installations qualified for the scheme since April.

The government brought forward the review due to concerns large solar farms could “soak up money intended to help homes, communities and small businesses generate electricity”.

The review will consider fast-track planning applications for large-scale solar projects over 50 kW - raising fears that many will be denied permission due to the sheer number of applications.

A review was originally intended to start next year, with a view to reduce the amount energy companies were paying for tariffs by 10 per cent by 2014/15.

The government intends to cap tariff payments at £360 million in 2014-15, rather than the previous estimate of £400m.

This review is now expected to be completed by the end of the year, with the tariffs remaining unchanged until April 2012.

Several contractors told CN they are reconsidering their plans in light of the government’s announcement.

Enfinity UK business development director Robert Ayres said the decision raised questions about the coalition government’s commitment to carbon emission reductions.

He said: “Disappointingly, at a time when the solar PV sector is emerging as a real driving force within the economy - creating jobs, investment and opportunities - the government has acted to undermine the ability of business to invest in the sector and the technology, again placing jobs at risk.

“As with all emerging markets there are possibly examples of manipulation of the market-driven opportunity, but to react to this by the unprecedented fast-track review announcement has been the equivalent of using a sledge hammer to crack a nut.”

Alumet Renewable Technologies managing director Gary Summers said: “The constant pecking away at this matter has only served to undermine investor confidence in the entire market, which has a direct impact on growth plans,” he said.

It has also emerged that more than 20 solar executives have written to DECC, warning they are set to launch a judicial review against the government for failing to consider the consequences of bringing forward the FiTs review.

A group of more than 70 signatories, including Ecotricity chief executive Dale Vince, also published an open letter to Mr Huhne stating that the “decision to launch a fast-track review for all PV down to the size of small community and business installations has caused chaos in key parts of the sector”.

 

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