Government move could hit plans for solar panels on 3,000 Norwich homes
A move to install solar panels on thousands of homes around Norwich could be under threat, after the government unveiled plans to slash how much companies could make from the scheme.
Norwich City Council is in the midst of inviting companies to tender for a contract to install solar panels on about 3,000 council homes across Norwich.
But the government yesterday announced subsidies for solar electricity would be halved - and that could make the city a far less attractive prospect for any company which might want to install the panels.
While council bosses were last night bullish the scheme could still go ahead, they acknowledged the lower rate could put companies off from tendering for it.
Through the scheme, the council would 'lease' out the roofs of suitable council homes to the successful supplier of the technology, which would install and maintain the photovoltaic panes for 25 years.
In return, the company would receive the feed in tariff – a guaranteed payment made to the owner of the system for energy produced.
The tenants would benefit from free electricity at certain times of the day and would save between �100 and �200 a year, while the city council would get a payment for each unit of energy generated by the household but not used and fed into the national grid.
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The council had been keen to get a supplier in place quickly, because the government had already indicated that the tariff would be reduced for systems not installed by April next year.
But yesterday the government set out proposals which will slash how much is paid. The Department of Energy and Climate Change (Decc) warned that without action to control the situation solar electricity would be costing �980 million - or �26 extra on the average household electricity bill - by 2014/2015.
Under the proposed changes, existing installations will not be affected by the changes, with their rates left at 43.3p per kilowatt/hour of electricity produced for domestic panels.
But households which do not get their system installed and ensure their request for accreditation is received by their energy supplier before December 12 will only receive the higher tariff until April 2012 and then a reduced rate of 21p per kWh.
And schemes, such as the one proposed for Norwich, where companies install the technology on a number of homes for free and then claim the subsidies while the householders benefit from lower bills as solar supplies some of their power, will see rates cut even further.
Under the proposals, companies or organisations who receive payments for more than one installation on different sites, will only get 80pc of the 21p tariff for electricity from panels put in from April 2012.
A spokeswoman for Norwich City Council, which has a separate project to install solar panels on the roof of City Hall, said: 'We are in a tendering process at the moment for both City Hall and a proportion of our council homes.
'The risk around a reduction in the feed In tariffs was something we considered when we did the business cases for those schemes.
'We will need to wait and see if these reductions affect the number of contractors coming forward to do that work.'
In September, Norfolk County Council unveiled plans to create a private, standalone energy services company to tap into energy initiatives such as the feed In tariff, with solar panels on schools, libraries and other council buildings.
A spokesman for Norfolk County Council said: 'We are keen to investigate the potential offered by the renewable energy sector and this is not wholly dependent on the tariffs announced by the government.
'Clearly, we will need time to study the detail of what has been announced, but we believe there are other technologies, such as energy invertors, solar hot water and ground source heat pumps, which are not supported by the feed in tariff, which remain attractive and worthy of serious consideration.
'Even with these changes solar energy still remains an attractive proposition, providing cheap and clean power, albeit with a reduced revenue stream.'
• What do you think of the decision to slash the feed in tariffs? Write to Evening News Letters, Prospect House, Rouen Road, Norwich NR1 1RE or email firstname.lastname@example.org