What do DECC changes mean for Scottish businesses?

Our Chairman, John Forster, talks about how Scottish businesses will be affected by the proposed DECC changes to the Feed-in Tariff:

In only a few short months the solar industry has gone from being the rising star of the renewables revolution to a sector under incredible pressure.

Following the UK government’s Department of Energy and Climate Change (DECC) planned review of the Feed-in Tariff (FiT), a consultation was launched in August setting out plans to slash the sub 10kW solar tariff by an astonishing 87% and stripping back the sub 50kW tariff (popular with many businesses) by almost 70% from January 2016. The ability to pre-register or lock into a tariff level will also be removed, from 2016.

The UK government’s proposed cuts threaten to dismantle all the work invested in creating confidence and stability for the industry and investors, which have driven growth in Scotland’s economy.

What does this mean for Scottish businesses?

With over 5GW of on-shore wind and barely 200MW of installed solar it is clear that solar combined with a growing energy storage industry can provide the necessary balance to help meet The Scottish Government’s renewable electricity aspirations.

It is clear that those installing solar in 2015 before the cuts, will benefit from the greatest return on their investment if they act now.

However from 2016 there is still hope for the future of solar. After the massive cuts to the FiT in 2011, we saw a 70 per cent fall in the cost of solar panels. And again we expect a similar outcome, as these final cuts are implemented. This could mean that a high energy using business could still see a 15 per cent+ annual return on their investment.

A further drop in costs will follow the planned removal of the Minimum Import Price (MIP) imposed on Chinese manufactured panels in 2013 which could well bring a further 25 per cent reduction in the price of panels.

With the International Energy Agency (IEA) predicting that solar could be the world’s largest source of electricity by 2050, we can be confident that irrespective of the Government cuts, solar will play an increasingly significant role in Scotland’s energy sector.

To speak to us about how to benefit from solar and how this will affect your business contact me on John.Forster@forstergroup.co.uk

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