HC 1605 Energy and Climate Change and Environmental Audit CommitteesWritten evidence submitted by Niko Miaoulis

I am Niko Miaoulis the owner of a small PV installation company called Greenman Solar in Kent, we achieved our MCS accreditation in March 2011. Since the inception of our business in January 2011, we have invested £100,000 of our own money in setting up an ethical, professional company, closely following the government mandated MCS and REAL ethos and criteria. As with other similar enterprises, we have not burdened the government at all in claiming, benefits, grants, incentives or any other “carrots”, we just spent the money, hired the people and grew the business. In following the guidelines and mandatory systems to the letter, we (wrongly) presumed that the government would also follow its well publicised roadmap for solar PV, in gradually reducing the FIT from April 2011 to match the falling price of installations.

In August the government decided to reduce the tariff for 50kw+ systems to 20p. Although this was a decision that cost money and jobs (and upset many big players who had invested millions), it was sold (by the government) on the basis that it had made the difficult decision in order to “protect” the FIT for those small domestic installations that it was originally intended for. The plan was always for small yearly reductions (15% ish PA) for new installs starting in April 2012. This swingeing proposal to reduce the domestic FIT to 21p per KWH (more than halving it overnight), would make it totally uneconomical for most people to install solar PV, with payback periods of nearly 20 years.

One of the few growing industries in the UK at the moment is the Solar PV design and installation market.

This industry now directly employs over 30,000 people in the UK and indirectly nearly as many again.

If the government make this very myopic decision, not only will our own fledgling business not be viable after December the 8th, every other similar business will close down virtually overnight, throwing 60,000+ people out of work and killing stone dead one of the few good news stories in the UK at the moment. The Government will also have no possibility whatsoever of meeting its on going green energy commitments and targets.

If the governments “consultation” on feed in tariffs cements the proposed cuts, there will be billions lost in redundancies and lost tax/vat receipts and a large number of professional people left high and dry by a government that encouraged them to invest and grow their green energy businesses, then virtually immediately afterwards pulled the rug from under their feet.

The fact that the government have bizarrely, initiated a “consultation” which concludes on the 21st of December, whilst the proposed changes (which are being consulted on) take place two weeks earlier on the 12th of December, strongly suggests a fait accomplish, and is open to some considerable criticism, if not a legal challenge.

It is a fact that the FIT system does not cost the government a penny, the tariff is paid by the electricity companies, who are under huge pressure regarding unwarranted price hikes and blatant profiteering. At the moment the FIT adds less than £1 per annum to everybody's electricity bill, which is a small price to pay for meeting our green energy targets.

If the current rate of take up of solar PV was to continue for the next 10 years (highly improbable), FIT would add about £15pa to everyone's electricity bill, a mere fraction of the huge and unwarranted electricity price rises foisted on customers in this year alone.

Given the vast amounts of money which are regularly invested by the government in order to protect or create a handful of jobs, along with the even more eye watering amounts spent on paying benefits and subsidising low paid jobs, the relatively tiny amounts of money paid in FIT have resulted in an unprecedented number of high quality companies and jobs, who are designing and installing worthy and worthwhile technology, resulting in very happy consumers, a vibrant, hi-tech industry and a path to a much greener and energy independent Britain. In one myopic foul swoop the government propose to kill it all, why?

If there was one way to continue growing this currently vibrant “good news story” (which the government should be congratulated on for starting and sponsoring it in the first place), whilst curtailing the number of installs this would be it.

The main reason that solar PV installations have recently grown so dramatically, is due to the practice of “rent a roof” where large organisations (often large players in other industries)  actively hard sell a “free solar installation” in which the customer receives modest “free” electricity (approx. £200 pa) whilst the, company who owns and installed the system receives the FIT (approx. £1,400 pa).

As it became apparent how lucrative this 25 year cast iron 10-15%+ ROI was, these large organisations swamped the UK with an avalanche of junk mail and sent teams of aggressive sales people out knocking on millions of doors, hard selling solar PV.

The original spirit of the domestic FIT system was intended for the individual property owner, not for large businesses (who can buy and install in bulk and aggregate the benefits of multiple installs) to own thousands of installations on private households roofs and reap the high rewards which were only ever intended for one individual household. This practice is morally wrong and has resulted in the current big spike of installations, these comparative increase in this type of installation versus an individual domestic install, should be closely studied and analysed before any decision is made.

The “big idea” of the original scheme for the consumer was the very empowering benefit of having your own mini power station and being much more aware of your energy consumption and carbon footprint. Ask any actual owner of such a system and they will all tell you that their energy savings are at least triple the actual output of the system, due to their much higher awareness. Ask the owner of a rent a roof system and you will not get the same response.

Similarly, in the MCS ethos, the installers were originally intended to be small start ups like ourselves, who worked very hard, investing much effort and hard earned funds, in initially qualifying for the coveted MCS accreditation and then setting up and growing a sustainable small business serving and benefiting the local community. We alone invested over £100,000 in setting up Greenman Solar and following to the letter the government mandated rules. This worthy and well structured system, has created thousands of well run, highly respected, ethical small businesses throughout the UK.

The advent of “rent a roof” meant big companies and hard sell moved in, this has sullied the previously fantastic image of the industry, from both the “sharp practice” through to the anonymous and unaccountable sub contractors employed to bosh out as many installs as cheaply as possible.

Surely if the government simply legislated against “rent a roof” they would bring the system back to where it was intended for both the consumer and the supplier.

The myopic and ill conceived announcement has created an unprecedented rush to install before the December deadline. this has resulted in blatant profiteering, many suppliers are out of stock of virtually every component needed to install a solar array. There are thousands of installs booked, which will not make the deadline due to missing components, bad weather, or just running out of time. Who will sort out the resultant mess of half completed installs that the customer doesn’t want any more and the morass of legal claims, especially considering that many of the companies involved will liquidate immediately after the deadline?

As a further related point, the MCS system mandates strict criteria regarding warranty and guarantees for the consumer. Seeing as most of the installers will not have viable businesses after the deadline, who will sort out the raft of claims for shoddy work hurriedly installed to beat the deadline?

Finally, most companies in the industry, have high quality literature, press adverts and other media published, even in our relatively small business this adds up to many thousands of pounds. Who will compensate for the redundancy of these in this unplanned knee jerk decision?

The whole sorry mess is a disaster and will have a dramatically negative effect on hundreds of thousands of decent people from both the business and consumer side.

5 November 2011

Prepared 22nd December 2011