Solar installations collapse as FIT subsidy cut bites

Solar electricity installations in the last week of 2011 fell by two thirds on the same period last year in the wake of the government’s cut to solar subsidies, government statistics published today show.

Only 35 installations were completed in the final week of last year compared with 103 in the final week of 2010.

Because government statistics only go back to the week ending 2 January 2011, this is the first time a comparison of installations in the same period in two years has been possible, eliminating the effect of seasonal variations on the figures .

The government is currently consulting on plans to halve the feed-in tariff (FIT) paid to homeowners and businesses that install solar panels for the electricity they produce. However, last month a judge ruled the plans were illegal because eligibility for the higher rate ended on a date before the consultation had ended. The government is currently appealing this decision.

Howard Johns, chair of the Solar Trade Associaition, said: “I think these figures show the start of the reduction in the size of the industry.”

Johns said many of the Association’s members had teams of staff with nothing to do because of the uncertainty in the system. “I imagine a lot of solar companies will close this month if there isn’t a resolution on the feed-in tariff,” he said.

The data from the Microgeneration Certification Scheme, which registers all solar installations, also shows that immediately after installations ceased to be eligible for the higher tariff on 12 December the number of installations week-on-week dropped 97%.

It shows 29,892 installations were completed in the week ending 11 December but only a 934 were completed in the next week.This is because there had been a huge rush to install panels before 12 December in order to benefit from the high tariff.

Under the government’s plans, installations completed after 12 December 2011 deadline will be paid at the lower rate from April this year.