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Select committees warn over dangers to solar industry

Warnings have come from two parliamentary committees that planned Government changes to solar power subsidies may be fatal for the industry.
Select committees warn over dangers to solar industry
The verdict from the Environmental Audit Committee and Energy and Climate Change Committee is that, although the changes are correct, they are being implemented clumsily and could put at risk many solar industry jobs.

On Wednesday, a group of companies and environmental groups won a legal judgement against the proposed halving of the Feed in Tariff subsidy from 43p per kilowatt-hour (kWh) to 21p. It had been expected that the new tariff would come into effect from 1 April; but in October, the government said it would apply to anyone installing their solar panels after 12 December.

The High Court ruled that changing the tariffs before the end of an official consultation period was 'legally flawed'.

Friends of the Earth's executive director, Andy Atkinsm, told the BBC: 'These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs.

'Solar payments should fall in line with falling installation costs but the speed of the government's proposals threatened to devastate the entire industry.'

Joan Walley, who chairs the Energy and Climate Change Committee, said: 'The Government is right to encourage people to focus on saving energy before fitting solar panels, but these proposals will require most households to spend thousands of pounds on extra insulation before they even purchase the panels.'

She added: 'This will stop nine out of 10 installations from going ahead, which will have a devastating effect on hundreds of solar companies and small building firms installing these panels across the country.'

Environmental Audit Committee chairman Tim Yeo said: 'There is no question that solar subsidies needed to be urgently reduced, but the government has handled this clumsily.'

He added: 'Ministers should have spotted the solar 'gold rush' much earlier. That way subsidy levels could have been reduced in a more orderly way without delivering such a shock to the industry.'

MPs described the quick tariff change as 'panicky', and said it 'smacks of retrospective regulation, which undermines confidence in the Government's management of other energy policies'.

Click here to read more about the report.

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22 December 2011

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