Despite the government’s proposed halving of Feed-In Tariff (FiT) payments for solar installations, Leeds-based Oakapple Renewable Energy has confirmed that it is still forging ahead with its £100 million investment in the sector.
Although the cuts will adversely affect returns, Oakapple remain confident that solar PV installations still represent a viable long-term commercial investment.
Indeed the company believes the reduction in the tariff could actually prove to be a benefit to the industry in the long term as it will accelerate the expulsion of less professional operators from the industry leading to higher quality installations. It is also likely to discourage competition from overseas installation companies who may have considered entering the market.
Oakapple also believes, conversely, that the free solar panel model and roof leasing arrangements will become even more attractive for commercial and domestic property owners. With a significantly lower return on their investments, many may now decide not to incur the financial outlay required to invest fully in the systems themselves.
According to managing director, Philip Taylor, the FiT reduction is great news for those opting for free solar panels.
“It is of paramount importance to those fitting free solar panels to ensure the system performs at its optimum level over the next 25 years in order to maximise the return from the FiTs, as well as the generation of free electricity for the building owner,” he said. “This is in contrast to installers who have no financial interest in the system after the paid installation is complete” he said.
Oakapple also predicts the tariff reduction will have an additional positive impact on the industry as it is likely to further reduce component manufacturing costs and lead to greater research and development in improving solar PV efficiency and the development of alternative technologies.
“We believe the ultimate beneficiary will be the end user,” continued Taylor, “as it will encourage those within the industry to adopt a more forward-thinking and innovative approach to renewable energy technology.”