Proposed cuts of 87% to the Feed in Tariff (FiT) proposed by the Government in January 2016 could put thousands of jobs at risk in the renewables sector.
If the cuts go ahead, home owners investing in renewable energy could wait decades for a viable return on their investment thus cutting the fledgling renewables industry apart. FiT payments per unit of electricity produced would drop to less than 2p with property owners receiving approximately £190 less than what they currently receive at the present FiT rates.
NICEIC & ELECSA share grave concerns
The electrical certification scheme providers NICEIC and ELECSA both share concerns that should the cuts be introduced in January 2016, demand for renewable energy installation will nose dive leaving many people working in the industry at risk of losing their job.
Dani Putney, renewables specialist at NICEIC and ELECSA commented: “It has always been accepted that the tariff would need to be revised in line with falling installation costs, but at the proposed rates home owners would have to wait decades before they would see a viable return on investment.
“To suddenly pull the plug on funding in such a drastic manner could have a dramatic, negative effect on the market and potentially put thousands of jobs at risk.
“The Department of Energy and Climate Change (DECC) has admitted they are unable to quantify how many business will be affected.
“We would urge all those working in the sector to respond to the consultation and voice their concerns about the potential impact of this decision.”
“We believe there are some alternatives the Government could consider to safeguard the long-term future of the industry. We will be consulting with our members on the best options going forward before making our official response to Government.”
Why are the cuts necessary?
The cut in the FiT tariff is the result of the need to halt a £1.5 billion overspend on renewables according to the Department for Energy and Climate Change (DECC.) There have also been suggestions that the FiT subsidy could be halted entirely if costs cannot be controlled.
The FiT scheme is due to be phased out in 2018-19, however the Government have suggested that if the scheme cannot be placed on an affordable and sustainable footing, then the scheme will be brought to an end as soon as legislatively possible. There is an open Governmental consultation open until the 23rd October 2015 with responses invited via online survey.
People working in the renewables sector directly and the associated industries can visit the consultation page at the DECC website.