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Government delays solar feed-in tariff cut
Published:  21 May, 2012

The Department for Energy & Climate Change has confirmed it is to delay the next cut to the Feed-in Tariff for solar photovoltaic panels.

It had previously been expected that rates would be cut from 21p/kwh to 15p/kwh on 1 July 2012. This is a further reduction from the 21p rate which was introduced in 1 April this year, and also followed the controversial reduction in December 2011, when government reduced the FiT rate from 43p/kwh before the conclusion of a public consultation on the issue.

Following much speculation in recent weeks, DECC issued this statement on Friday 18 May: "Having listened carefully to the industry we are reviewing the date for the next reduction in solar tariffs and will be making a fuller announcement shortly."

Energy Minister Greg Barker echoed the statement, saying this decision was the result of “listening carefully to industry”.

Exactly how long the FiT cut will be delayed for, or whether DECC is considering cancelling the cut for the foreseeable future, is still unclear.

Plumbers' and builders' merchant Grafton Group welcomed the prospect of a delay, but said government must "make its intentions clear in the near future", to avoid further stagnation of demand and, ideally, opt for a meaningful delay to stimulate growth.

"The industry has witnessed a worrying drop in demand for solar PV panel installations since tariffs were halved in April, but the market could stage a recovery if further cuts were significantly delayed beyond the planned date of 1 July," said Paul Roche, Grafton’s sustainability and renewables director.

"There are many contributing factors that are suppressing demand, not least a general confusion among members of the public, and the backdrop of a weak economy that is hampering the building and housing sectors. A clear message that tariffs will remain stable for a longer period would give homeowners the green light to go ahead with their plans.

"We all want to see a renewed confidence and this is an obvious way to kickstart the industry. Grafton has shown its commitment by signing up to become one of the first Green Deal Providers and there is plenty of enthusiasm in the industry to show that solar is still a genuine opportunity for homeowners and businesses."