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Solar panel installations down more than 75%

Patrick Christys
Sep 16, 2019

You know the old phrase 'this just pays for itself'? Yep? Well it has gone out the window when it comes to solar panels and as a result, installations are down 75%.

Solar panel installations have, quite literally, fallen off a very high roof as suppliers struggle to cope with the end of subsidies and a damaging mis-selling scandal.

Gone are the days of people pumping electricity back into the grid and reaping the rewards. In fact, many people find solar panels are now no longer worth the hassle.

Installations last year were down more than 75% compared with 2015 as generous subsidies guaranteeing homeowners an income from selling power back to the grid have been eroded. From March this year, those subsidies, paid through a levy on everyone’s energy bills, were removed.

The Times reports that one million British homes — about one in 25 — have solar panels and they collectively generate the same amount of energy as Britain’s biggest power station. However, that number is now expected to stagnate despite growing awareness of the threat of climate change. Confidence in the industry has also been hit by a mis-selling scandal that has seen thousands of homeowners given false promises about the income their panels would generate to encourage them to take out high-cost loans to pay for them.

The Financial Ombudsman Service is dealing with more than 2,000 complaints from disgruntled consumers who feel they have been lied to by salesmen. Barclays Bank, which supplied many of the loans, has already put aside £38 million to pay compensation. Most of the companies accused of the mis-selling have now gone into liquidation.

Environmentalists and green energy providers are also concerned about the impact of government policy on the growth of solar power in the UK.

Last week, the Renewable Energy Association, Friends of the Earth and the power company, Good Energy, jointly wrote to the Chancellor urging him to reverse the proposed increase in VAT from 5 per cent to 20 per cent due on October 1. Exemptions mean the increase is unlikely to effect the cheapest solar installations but homeowners who want panels with batteries to store power, which is likely to become more popular now the feed-in tariff has closed, will be hit.

The letter, seen by The Times, says: “Addressing the climate emergency should be top of the government’s to-do list. The legally binding target to reduce UK greenhouse gas emissions to net zero by 2050 is an immediate challenge, not a distant goal. Solar power coupled with battery storage is not just a solution to climate change. It is an economic opportunity. However, the UK risks losing out if policy blockers are put in the way.

“The decisions we make now matter if we care about achieving net-zero emissions within a generation. We urge the Treasury to remove this damaging policy and get behind the British solar industry.”

The new rate of VAT has presented something of a dilemma for the fervently pro-EU Green Party because it is coming about only because of a European Commission ruling ordering the British government to standardise its rate with other member states.

If Britain left the EU without a Brexit deal, the government would not need to implement the increase.

Many in the solar industry question the timing of the increase, coming just one month before a potential no-deal exit from the European Union on October 31.

Frank Gordon, head of policy at the Renewable Energy Association, said: “Why the government is changing it now after resisting for years is an interesting one. But they don’t seem that interested in encouraging the industry. We used to have solar strategy up to 2020 and that has not been updated for a number of years now. There are also upcoming changes on grid usage charges that are a threat to the sector.

“We are clearly missing our interim carbon budget targets. The committee on climate change has said there is a policy gap between the carbon emission reductions we can lock in already and those we need to secure to meet the next target in 2032. All these problems are going to make all targets harder to achieve.”

Case study
Brian Thompson says he was tricked into taking out a £10,000, ten-year loan to pay for solar panels. He says he was told that the income from selling power back to the grid would supplement his pension. However, the amount of money he got was much less than he was told.

“I had to dip into my savings to pay the loan off. To me it was lies,” Mr Thompson, of Gateshead, told the BBC. A survey found that even after 20 years the income would not cover the cost of the loan.

The Financial Ombudsman Service said: “We often find evidence of pressure sales techniques and misleading sales literature or representations. So we’re telling the credit providers to put things right.” Frank Gordon, of the Renewable Energy Association, said: “There is a robust framework in place to deal with the problem and we are working to minimise issues as far as possible.”

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