HC 1605 Energy and Climate Change and Environmental Audit CommitteesWritten evidence submitted by Freetricity plc

(1) The drastic cut in the Solar PV FIT scheme will result in

Up to 25,000 job cuts, Freetricity alone has created around 400 new jobs(office, surveyor, architects install teams, electricians, roofers, scaffolders etc) and was to create many more. Our subcontracted installers have already started laying people off and we have cancelled all new hirings.

Serious financial issues for many companies who have invested risk capital under contracts through to April 2012 on the back of the government commitment. “Grandfathering” obligations has not even been considered.

Curtail drastically the overall ability of the UK to produce its own clean energy and reduce its reliance on fossil fuels

Through new technology shortly to be introduced seriously undermine the enablement of micro generation storage (every home and business being a micro power station) thus reducing dependence on large scale and foreign owned energy plants. Freetricity will introduce this world leading technology in 2 years time.

bring the governments commitment to a “green agenda” into question

Stop new major private sector investment into other new green technologies(eg air sourced and ground based heat pumps) when it is perceived that the government cannot be trusted to honour its comittments.

(2) The figures on which the cut are based are fundamentally flawed

The claim that Solar panel prices have reduced by 70% is based on a Bloomberg estimated figure from early 2008 to date. The FIT scheme commenced in April 10. Actual panel prices have reduced by around 36-38% in the FIT period. The only Uk/Irish manufacter of panels Dimplex can confirm.

The cost of installing a Solar PV system is made up of only 40% equipment, the rest is labour which has not reduced in cost.

The “budget” is not central government expenditure as suggested by politicians but merely reallocation over energy bills and this “budget” could easily be increased to support jobs and clean energy. The cost to delay the tariff change to April would amount to little more than £1 on all energy bills.

(3) The proposal to reduce the tariff by ano 20% for “free solar” and to add energy efficiency criteria wef April 2012 will hit the poorest households the hardest

Freetricity marketing of “free” and paid for solar (7300 applications in October 2011) produces 99.8% applications for the free option.

Most households other than upper middle class larger houses do not have the available cash to purchase a system or pay for energy efficiency measures

An 18 year pay back and 4.5% return under the proposed new tariff is not attractive enough to persuade even the rich to pay for a system and there is no debt finance available

Any continuation of the installation of solar PV will only work for large houses/businesses in the south of the Uk who least need this technology.


Delay the current cut until preferably April but at least until after the review is completed

Take steps to increase the FIT budget now at least for up to 30KW systems which will help those who most need it eg households and small community buildings.

Plan for a phased reduction with ample warning to the industry to allow business planning and certainty so that a world class industry can be built from the new SME’s in the market as was done by the Germans over 4 years and who are now leading the world in Solar PV exporting all over Europe the Far East and USA.

24 November 2011

Prepared 22nd December 2011