One of our neighbours just had a massive solar panel installed on their roof, and will benefit from the 45p per unit "feed-in tariff" for surplus power sold back to the national grid. However, there are fears that the boom in solar power in the UK may abruptly hit a brick wall. The feed-in tariff is to be cut to 21p per unit for any solar installation not completed and certified by 12 December. This change was only announced last month, so there has been a predictable uproar from installers, from consumers who had arranged installation but won't get the work done before 12 December, and of course from environmentalists. The government stands accused of hypocrisy, having loudly and repeatedly stated its aspirations to be the greenest government in UK history.
So why is the government doing this? Well, a little clue plopped onto my doormat this morning, in the unlikely form of our monthly free local magazine. Deep inside this little collection of advertisements for hairstylists and plumbers is a piece by one of the local firms that has been slapping solar panels on roofs all over the city. It bemoans the abrupt cut in the feed-in tariff, but then goes on to make a remarkable claim: even at the reduced tariff, consumers will still be able to lock in a return on investment of 6-8% per year "because of the expected decline in the price of panels after the new year".
Just why should the price of panels be expected to fall in 2012? This looks like the clearest possible admission that the cost of these installations has been driven up by the feed-in tariff, and bears little relation to the cost of materials and labour. Perhaps now we know why the government is cutting the tariff, and why it is unapologetic about providing so little notice. Many thanks, then, to our local contractor for (probably inadvertently) blowing the whistle on this scam.
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