Solar sector saw surge in demand ahead of August subsidy cuts

Published on Thursday, 02 August 2012 09:35
Posted by Vicki Mitchem

But businesses urge government to abandon November feed-in tariff cut, warning continued uncertainty is creating boom and bust


Businesses and homeowners rushing to install solar panels ahead of the latest cut to the government's feed-in tariff subsidy scheme caused a surge in demand in recent weeks, according to new government figures.

Provisional figures by the Department of Energy and Climate Change (DECC) this week showed the number of solar PV installations increased from 6,105 in the week ending 22 July to 8,305 in the week ending 29 July as people rushed to complete projects ahead of the 1 August cut to the feed in tariff subsidy.

The figures showed that more than 42MW of new capacity was installed last week, compared to 26MW the previous week, representing a 62 per cent increase in capacity.

The surge in installations was triggered by a cut to the feed-in tariff on 1 August, which saw the subsidy for systems with less than 4kW of capacity drop to 16p/kWh from the previous 21p/kWh rate.

The number of projects installed in the 4kW band alone increased by 30 per cent, from 5,750 installations in the week ending 22 July to 7,512 new installations last week.

The figures also effectively confirm government plans to cut the subsidy for small scale solar again in November, as part of a new cost control mechanism which triggers cuts to incentives every three months if the level of deployment exceeds a set level.

As more than 100MW of capacity was installed in the three months from May to July, the subsidy is now set to be cut by a further 3.5 per cent in November.

However, writing on Twitter industry campaign group Our Solar Future urged the government to abandon its plans for a further round of cuts, warning the continual reductions to the subsidy have created a boom and bust cycle for the industry.

"Roller-coaster ride of three monthly PV degressions in stark contrast to genuine TLC [transparency, longevity and certainty] for all other (mostly more expensive) FIT technologies," it said.

In related news, Mitsubishi Motors yesterday confirmed it completed the installation of a 50kWp solar array on the roof of its UK headquarters in Cirencester, Gloucestershire, ahead of the August tariff cut.

Gloucestershire-based Glevum Energy installed 196 Mitsubishi Electric solar panels, which are expected to generate 40,050 kWh, saving 17.2 tonnes of CO2 emissions each year.

Mitsubishi said it expected to receive a combined annual financial benefit of over £10,100 from the installation, including £6,100 income from the feed-in tariff a year and £4,005 in savings from reduced energy costs.

"The decision to install Solar PV was a straight forward one," said Lance Bradley, managing director of Mitsubishi Motors in the UK.

"As well as offering good strong, sound business benefits, this move complements our growing reputation of leading the way in environmental technologies."

Source: ©BusinessGreen

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