Customers and businesses get burnt by renewable energy schemes

Less hi-tech triggers include new regulations, much maligned by the wider business community, but actually a tried and tested means of spurring entrepreneurs – and chancers – into action.

The problem is that regulations that provide incentives – whether barriers to entry, grants or subsidies – can vanish as swiftly as they appear: the recent fiasco over the renewable energy feed-in tariff (FIT) is just the latest high-profile example reports The Telegraph.

Last month’s Supreme Court victory for Friends of the Earth and several installers reversed the Government’s decision to slash the subsidy in half from December 12.

The 30,735 homeowners and businesses who installed solar panels after the December cut-off date and before March 3 suddenly became eligible for the higher feed-in tariff of 43p per kWh of energy generated. It was originally cut to 21p with just six weeks’ notice.
For many businesses that sprang up to take advantage of the original tariff the damage had been done. The fledgling industry was already plagued by perceptions of a “cowboy” culture.

Researcher Richard Hanna has surveyed more than 500 installers as part of his doctorate at the Centre for Environmental Strategy at the University of Surrey. Perhaps unsurprisingly, he found that three-quarters of the firms had 10 staff or fewer and the same percentage had only been installing microgeneration equipment for less than two years.

Training, while widespread, was also of mixed quality. More than half of the companies surveyed did not work in the micro-generation sector originally and most came from backgrounds in electrical and mechanical industries, plumbing, heating and gas, or other aspects of buildings services.

One biomass boiler distributor said: “I have been involved in this industry for approximately 10 years now. I am amazed by the numbers of poor quality equipment, installations and mis-selling.”

Government attempts to get to grips with an industry it has brought to life are hitting home.
The Department for Energy & Climate Change announced last week it was delaying new subsidies designed to encourage the take-up of renewable heating units until the summer of 2013.

Mr Hanna thinks a delay will give time to put in place proper consumer safeguards, particularly around minimum energy efficiency standards. Homes will also have to achieve an energy performance certificate rating of “D” to receive the FIT.

Installers are already responding to these regulatory changes. One said: “I feel very let down, having started up a business costing several thousands and taking on an apprentice thinking we could build the company up. I am now wondering where to go from here, especially not knowing if I can afford to keep the apprentice or not.”

His sentiments will be understood by any small businesses in a market so influenced by Government policy.