Partner Article

The Feed in Tariff cut: winners and losers

Mark Rigby, director of Energy Gain Ltd explains what cuts to the Feed in Tariff will mean.

There were winners and losers when the Government’s announcement that they were reducing the Feed In Tariff (FIT) at the end of last year.

Using Energy Gain as an example we saw our business increase by a staggering 500% virtually overnight as those fence sitting customers, both consumer and corporate, became ?rm orders in an effort to beat the December 12 deadline. Being one of the smaller companies, we had the foresight to ensure we had readily available stock. Although there were shortages of some components, we had the ?exibility to overcome these. However, this was not the case for quite a number of the bigger suppliers who tend to rely on imported stock. In this situation, they were quite literally caught short, unable to ful?ll orders because most of what they needed was still on the high seas when the government made its announcement. So for once the smaller UK based companies were able to succeed where the bigger operators were left ?oundering!

In the run up to the Government announcement consumer education around the product bene?t as well as the FIT mechanism was woefully inadequate. Playing on this naivety, big international installers suckered in a great many consumers with the promise of “free electricity” in exchange for their roof space. Ill informed consumers readily signed up to these deals without realising that what in fact they were doing was signing away was their right to a 25 year tax free income which in the long term would be worth a great deal more than the price of the electricity they would consume over the same period! Added to which, the UK tax payers £s were going straight into the pockets of the big corporate installers both in the UK and overseas.

In spite of the debate over the legality of the proposed cut in FIT and the media coverage that its generated, education is still not at the heart of the Government’s Renewable Energy policy. In fairness, a lot of effort has been made very successfully with regard to ensuring new builds comply to requirements. The real area which appears to be slow in comprehending the message, however, are those responsible for existing properties, many of which were built at the beginning of the last century and which form the bulk of the market,

It’s not only the consumer that the Government needs to target it’s message more effectively but also the relevant trades. I recently had some rewiring work done by a very competent tradesman who was baf?ed by the whole Feed In Tariff policy, he just didn’t understand how it worked. Once explained to him he could see the bene?ts for his business as well as those for the consumer.

The situation now is still up in the air and the industry is in turmoil as to what will happen next and the consumer? Well, when it comes to renewables they seem to be the last to know but at least some of them are a lot wiser than they were six months ago!

This was posted in Bdaily's Members' News section by Tom Keighley .