Changing the level of subsidy for solar power will effectively “kill off” the commercial sector’s interest in the energy source. This is the claim from the UK’s largest renewable energy equipment supplier, which suggests that cuts to the Government’s Feed in Tariff (FiTs) due in December come way too soon and make the rate of return unattractive.
The Government plans to halve the FiTs to 21p/kWh for schemes up to 4kW in size, which are largely installed in homes across the UK.
John Adkins, Group Managing Director at Myriad CEG said: “The proposals do not recognise that the interest in commercial markets has been lagging behind the domestic sector and that the proposed changes to the tariff bands completely kill any opportunity for commercial businesses to adopt solar PV.”
He said that a 5% rate of return, which might be attractive to domestic customers, wasn’t big enough to tempt to commercial businesses whose cost of capital is typically 8%.
He said: “I don’t know of any business which would invest to get such a low rate of return. Tariff levels need to be revised upwards for businesses.”