At Mitsubishi Electric, we are urging the Government to reconsider the new cut-off date when the Photovoltaic Feed In Tariff will be halved.
Everyone accepts the need for a reduction but to avoid damaging the industry needs different timing and whilst we recognise that the Government cannot wait until March, this still leaves a huge scope for damage limitation if they could accept a date such as the end of January.
We know that installations have exceeded predictions and that ROI has drifted into double figures. We also recognise that something needs to be done to correct this but it must be introduced in a measured and sensible manner.
I estimate that we alone face sales losses of £10m+ due to cancelled orders coupled with stock currently at sea which cannot arrive in time.
The industry has already demonstrated that it can respond to change with the way it bounced back following August’s Fast Track Review, curbing large scale, investor-backed schemes.
The response required quite a bit of market realignment and ‘faith’ in the prospects for Renewables in the UK and this was the key factor in the schemes success.
To have another impossibly tough deadline thrust upon us within four months is an extremely serious blow to the industry and is already having a profound effect that will stunt confidence in the solar industry and directly affect both the market and the Government’s emissions targets.
As a manufacturer, we have seen price erosion of 30% per year and we have responded by accepting reduced margins, improving efficiency and looking towards the longer term for profitability.
I cannot think of many industries that could cope with such reductions in such a short period and the latest changes could seriously stall the industry and generate real financial harm to companies within it.
We are also in danger of creating a feeling that the UK is not a stable and reliable market for renewable technologies.
As a global manufacturer, we are willing to embrace the challenge of a revised tariff structure but such a short notice period will directly influence the scope, scale and level of participation of companies such as Mitsubishi Electric.
Unreasonable context changes imposed by the Government may ripple throughout the industry and when this confidence evaporates it will be extremely difficult to rebuild.
General manager of Mitsubishi Electric’s Photovoltaic Systems Division