Why does the spending review mean for local solar panel installers?

Why does the spending review mean for local solar panel installers

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Last Wednesday solar panel installers up and down the country held their breath as the chancellor, George Osborne, began to unveil the coalition government's cuts.

Rumours leading up to this historic spending review suggested the government would cut the feed-in-tariffs' and the Renewable heat incentives'. With both schemes offering homeowners, local authorities and businesses a clear return on their investment from generating their own energy, these cuts would be enough to stop growth in the solar energy industry in its tracks.

However, when the announcements of the cuts came, there was an initial big sigh of relief from the solar industry, before a sense of confusion and uncertainly about what had been done and what was going to happen.

This came from the government announcing that the Feed-in-tariffs were essentially safe for now' providing there was not too much demand:

"Feed-In Tariffs will be refocused on the most cost-effective technologies saving 40 million in 2014-15. The changes will be implemented at the first scheduled review of tariffs unless higher than expected deployment requires an early review"

With the review due in 2012, there is now an 18 month window for investors to guarantee the highest rates of returns. If you buy within this period you will receive the money at these rates, tax free, for the next 25 years.

Normally this would mean a gold rush for the solar panel industry, but two factors may prevent this. Firstly, the fact the government have signalled future cuts may make investors weary of the claim that if they invest now their rates would be guaranteed for the next 25 years. Secondly, the Government has said they will move the review date forward if there's a higher than expected deployment'. But what does this actually mean?

So far no figures have been released to define how many KwHs needs to be produced from mirco-generating systems before they call the review forward.

All we have to do is wait for the answer. In the meantime local solar panel installers have a strong argument to encourage people to invest now!

Perhaps this could be a great time for local solar panel installers. But, with so much uncertainly, I'd certainly recommend putting some of the profits away for when the markets change.

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