Earlier this year the Government put in place plans to end the successful Feed-In Tariffs (FITs) scheme and replace it with a Smart Export Guarantee (SEG). Since 2010, under FITs, over 830,000 households¹ businesses and communities have been able to receive payments for clean energy that is both exported to the grid and generated for their own use.
As the Government moves away from a subsidy-free future, they have been looking to develop market-led solutions that are not reliant on subsidies. In January the ‘Future for Small-Scale Low Carbon Generation: A consultation on a Smart Export Guarantee’ was released and leading consumer protection organisation HIES (The Home Insulation and Energy Systems Contractors Scheme) responded raising its concerns with the transition.
HIES Director of Policy, Adrian Simpson said:
“HIES has the aim of protecting the consumer before, during and after the purchase of any small-scale renewable product. We want the high levels of consumer protection to remain, and consumers to receive a fair price for the electricity they generate.”
“We feel that subsidies have been a success, removal of them we feel will have a monumental impact on the number of consumers who wish to have renewable energy solutions installed in their homes, not to mention the detrimental knock-on effect this will then have to the installers.”
How will this impact installers?
As we already understood the risks to consumers, we wanted to know what the issues would be for installers, so we invited installers nationwide to participate in a survey and provide their opinions in 2018. We had 88 responses to the survey, which highlighted some shocking statistics:
- 56% of respondents believe there will be a 75% or more decrease in sales
- 74% of respondents believe there will be a 50% or more decrease in sales
- 68% of respondents anticipate 50% or more job losses
- 70% of respondents believe 50% or more firms will go out of business
- 54% of respondents anticipate 75% or more decrease in consumers buying Solar PV
- 82% of respondents anticipate 50% or more decrease in consumers buying Solar PV
- 54% of respondents believe 75% or more firms will stop doing Solar
Sometimes opinions can say much more than statistics and here is a selection of what our members thought the effects would be when FITs finish in March 2019:
“It will reduce business.”
“Devastating loss to an already damaged industry. The FITs are huge incentives to help people choose a sustainable energy source to help us cut carbon emissions.”
“Quality installers will leave the industry and will bring cowboys into the industry, through lack of regulatory requirements as MCS will be defunct, putting homes at risk through poor installations and the use of unregulated equipment.”
“Further reduction in domestic retro-fit installations, and without any support the public will not understand 15-20-year payback periods unless they never plan to move home. Most installers will lose the additional business and lose well-qualified staff due to job losses.”
HIES are calling for:
- Clarity around tariffs. Will consumers easily be able to understand the tariffs and switch between them to get the best deal?
- A smooth transition between the Export Tariff and SEG, ideally without any regulatory gaps where installers can carry out.
- Increased competition for Microgeneration Generation Certification Scheme equivalence.