Households lose incentives to install solar power

The solar power industry has warned that it is on the brink of crisis as a result of Government "incompetence" in the awarding of grants for householders buying renewable energy.

A scheme paying thousands of pounds towards the cost of installing green energy in people's homes ended last week without a working replacement.

In theory, a new scheme is being launched today but details of its operation have not been finalised and application forms for funds will not be available until the end of this month.

Funding for householders is set to fall under the new grant system, said the trade bodies for solar and wind power, the Renewable Energy Association and the Solar Trade Association.

The Energy Savings Trust, which is administering the new Low Carbon Buildings scheme for the Department of Trade and Industry, concedes that grants will not be available until the end of this month at the earliest.

Installers say the uncertainty about the new scheme, the likelihood of reduced funding and the delay in grant applications has damaged an industry which should be at the forefront of attempts to reduce Britain's carbon emissions.

Rates of installation of solar power on roofs to power electricity or heat water in Britain are tiny in comparison to Continental countries such as Germany, which put solar power into 200,000 homes last year.

Seb Berry, a spokesman for the Renewable Energy Association, said "The Government says we are all players on the stage of climate change but it is cutting the money for individuals to install clean energy."

The grant problems were symptomatic of a wider reluctance by central Government to throw its weight behind the renewable energy sector, he said. Unless the Government improved its performance, there could be a "brain drain" of talented installers and technicians to Europe, he warned.

One company, Sunpowered Energy Systems, of Southsea, Hampshire, said it may have to lay off some of its 18 staff "within weeks" because of the grant delays.

"The industry is on the verge of collapse and it's because of incompetence," said Sunpowered's managing director, Sean Cavendish. "We have been left in limbo. People are asking us: 'Is there going to be a grant or no grant?' and we don't know.

"How can you have a grant, stop it and have nothing to replace it? These programmes are being run by people who don't understand business."

A spokesman for the Energy Savings Trust said there would only be a "short gap" before householders could begin claiming grants again.

Under the Low Carbon Buildings programme, £18.5m is being made available to fund micro-generation, carbon-free schemes. Some £6m of the money is earmarked for individuals wishing to install solar panels on existing homes while the majority is for small community projects and new buildings.

Gordon Brown announced an extra £50m for micro-power in the Budget last month but the money will be split between seven technologies - some emitting low levels of carbon.

The Government has declined to say whether any of the new money will go towards solar panels for existing homes. It is possible that discussions over what to do with the Chancellor's unexpected renewable energy money may be delaying the introduction of the new scheme.