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The solar power industry could be “strangled at birth” by cuts to the subsidies available to consumers for installation of photovoltaic panels, Labour has said.
The widely anticipated cuts, which the industry warns could seriously damage growth and jobs, would come in for panels installed from 12 December. The scale of the cuts was initially revealed in a document leaked to the internet.
Existing installations will not be affected by the changes, with their rates left at 43.3p/kWh of electricity produced for domestic panels.
But households that do not get their system installed and ensure their request for accreditation is received by their energy supplier before 12 December will only receive the higher tariff until April 2012. After that a reduced rate of 21p/kWh will apply.
The feed-in tariffs pay people for the electricity they generate from small-scale renewable technology. Labour said the change in the subsidy threatened the solar industry’s existence. Shadow energy secretary Caroline Flint told energy and climate change minister Greg Barker that the solar industry employed 25,000 people in 3,000 businesses. “With growth flat-lining everywhere else, this announcement actually threatens to strangle at birth the solar industry,” she said.
Barker insisted the planned cut was necessary to avoid “boom and bust,” with money available for the scheme drying up as a result of an overly generous subsidy. He said that it was adding to overall household energy bills.
Barker told MPs that, as the cost of installing solar photovoltaic systems had fallen by 30%, it was right to review the tariff.
Dr Shawn Qu, chief executive of Canadian Solar, which provided 22,000 solar modules to build the UK’s three largest photovoltaic power plants in Cornwall, told PE that the cost of solar technology and components was going down. He said polysilicone, a key material, was a tenth as expensive now as it was four years ago. “This is clean energy but people don’t want to pay extra – they want high efficiency at low costs,” Qu said.
“The biggest problem is how to reduce cost but also produce highly-efficient solar panels. We are looking at ways to reduce material usage. For example, solar wafer thickness used to be 300 microns several years ago; now it’s 180 microns. Silver is expensive especially when it’s viewed as an investment vehicle in the wake of the financial crisis. We fight hard to reduce silver usage.”
Labour’s Flint admitted that the feed-in tariff “may have needed adjustment as costs fell” but said that the government’s handling of it had “left 25,000 workers in a high-tech industry of the future facing the dole”.