Subsidies to solar scam cut

Huhne and House

Chris Huhne MP and Council Leader Keith House launch solar scheme that allows Council to get tax free handouts from hard up consumers

The coalition government has slashed the amount of money people can earn by selling back the surplus power they generate from solar panels after the subsidies which fund the scheme proved to be over generous.

Almost 90,000 solar installations took place between April 2010 and October this year as wealthier people able to afford  the typical £9,000 start up cost signed up to be to get a 10% guaranteed TAX Free index-linked income for 25 years – a business proposition described by one participant as a ‘no brainer’.

A £1,000+ a year tax free income was possible as the scheme guaranteed to pay users 43p Kwh for energy (which would normally cost 11p) by adding a charge to everybody’s fuel bills.

But now, just as installation costs have plummeted to the point where poorer people can jump on the bandwagon, the government have announced they will slash the subsidy to 21p per Kwh as from December 12.

Existing agreements will be honoured, so those who already have systems in place will continue to receive their tax free handouts for the next quarter of a century, funded by les well off bill payers.

The Department of Energy and Climate Change claim that a 30% drop in the cost of installation meant that the subsidy had to be lowered to prevent too many people form taking advantage of it and that it was always the intention to cap the scheme.

Meanwhile homeowners who could not afford installation were able to rent out their roofs to installers and get free electricity but companies say the cuts will mean they can no longer offer to install panels for free for poorer households, in return for keeping the subsidies.

Daniel Green the CEO of ‘Home Sun’ told the Guardian:

“The cuts the government have cited are socially regressive,

Only the super wealthy with an eco-conscience will be able to wait now for a breakeven of 14 years on a solar investment.”

During the  summer Eastleigh Borough Council had 288 solar PV panels fitted to the roof of Fleming Park at a cost of £185,000.

Ironically they were officially launched on August 1 – the same day that the Energy secretary, our MP Chris Huhne, cut the subsidy to large installations by 70% – making any similar future projects unviable according to many industry analysts.

Eastleigh Council say the energy generated by the panels will be worth up to £25,000 a year in income –or £625,000 over the course of the 25 year agreement – but failed to mention that this a subsidy which is coming out of residents energy bills.

One local resident, a 54 year old who did not wish to be named, reacted angrily to the news:

“This is blatant profiteering at the expense of local bill-payers. As far as I ‘m concerned solar subsidies are just another tax – this is not saving Council Tax payers money – it’s actually costing them.

Council Tax payers paid for the panels to be installed – now they have to subsidise the electricity they produce as well”

Photo: EBC

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  10 comments for “Subsidies to solar scam cut

  1. mm
    Eastleigh Xpress
    November 2, 2011 at 12:39 pm

    Interestingly this has just come up during DECC quesions at the HOC Energy select committee.
    Bob Gardiner MP (lab) really pressed Chris Huhne over FIT tariffs asking why
    “poor bill payers should subsidise richer bill payers who can afford to solar panels installed?”

    He suggested the subsidy should come from general taxation.

    Mr Huhne replied that poor bill payers could get help like ‘warm front’

    Hmmmm… £3,500 worth of insulation v 25 years of free electric and £25,000 tax free..

    • mm
      Eastleigh Xpress
      November 2, 2011 at 6:05 pm

      Another MP described the FIT scheme as a ‘double whammy’

      Firstly we subsidising the Chinese companies who make almost all of the solar panels then we are also subsidising the people who have installed them.

      Bob Gardiner also badgered Mr Huhne to come up with a figure for how much each bill payer would have to fork out in solar subsidies in future.

      (So far, the committee was told they had added an extra £6 to everyone’s fuel bill.)

      Mr Huhne managed to avoid answering the question for some time before finally telling
      Bob Gardiner “If you knew unitary maths you could work it out yourself”

      Well, what is unitary maths and what is the answer???

      I have a feeling it is one he would rather we didn’t know…

  2. November 2, 2011 at 5:27 pm

    Its interesting to note that there is a rush by companies to sign people up for solar panel installations even though there isnt the quantity of equipment in the country to meet demand, let alone the engineers to instal the stuff.

    You’d think that new builds’ would include this tecnology the same way that wind turbines have been included on some recently built commercial buildings. OK I know that the turbines are not that efficent during still cold snaps etc and I am not avocating that turbines should be part of every building package.

    Ground source heat pumps have been and are being succesfully run in various builds I have come across. My point is, that the rush into Mr Huhnes third industrial revolution via renwables needs to be planned on a long term basis that doesnt include the dreaded green taxes that all householders ‘covertly’ pay along with the additional burden that businesses have to shoulder and also threatens investment.

    You have to wonder why this industry has to rely upon goverment subsidies to exist. Theres a scandal in the USA going on at this time where government monies failed to keep the company from going under.

    If renewables were seen to be profitable, why arent investors falling over themselves in the rusn for a piece of the action?

  3. mm
    Eastleigh Xpress
    November 2, 2011 at 5:56 pm

    You’d think that new builds’ would include this tecnology

    From 2016 there will be no gas central heating fitted in new builds – so that will apply to a lot of the new houses being built under the local plan.

  4. Peter Stewart
    November 2, 2011 at 8:23 pm

    From 2016 there will be no gas central heating fitted in new builds – so that will apply to a lot of the new houses being built under the local plan.

    What’s this? No more gas central heating from 2016? Does this imply a switch to nuclear?

    • mm
      Eastleigh Xpress
      November 2, 2011 at 8:54 pm

      No Pete no nuclear reactors in the home. Houses will be zero carbon.

      Heavily insulated with solar panels and ground source heat pumps.

  5. Peter Stewart
    November 2, 2011 at 8:25 pm

    p.s. I am appalled by the suggestion that this scam…er scheme…was designed to enable only the relatively wealthy to see a return on their investment (any investment these days)!

    • mm
      Eastleigh Xpress
      November 2, 2011 at 8:56 pm

      I’m only sorry that I didn’t jump on the scam myself. You can’t get 10% tax free on £10k down the building society can you?

  6. November 2, 2011 at 9:40 pm

    The reduction in the feed-in tariff was discussed on Radio 4’s “You & Yours” programme today, 2nd November.

    If you missed it, its available on the BBC’s website;

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