Majority of UK solar system providers and installers excluded from LCBP

(07/02/2007)

Phase 2 of the government's low carbon buildings programme (LCBP) has sparked outrage in its alienation of the majority of the UK's solar system providers and installers. By naming only seven approved framework suppliers to be used in association with the £50m funding grant provided, the government has instantly excluded a wealth of small businesses.

Of the seven framework companies, only three will be allowed to apply for grants for not-for-profit organisations: Filsol, British Gas and LPC. Of these three, only Filsol (whose managing director is the chairman of the Solar Trade Association) actually manufacture solar thermal products, British Gas has limited relevant experience and LCP don't appear to have a history in this field.

In a letter to the Department of Trade and Industry (DTI) Secretary Alistair Darling dated January 11 2007, Robert Kyriakides, Managing Director of Genersys, one of the UK's biggest flat plate solar companies, observes that the scheme is deeply flawed and may lead to the demise of many small businesses: "These installation companies are entrepreneurial and formed by individuals who take significant financial risks. Many of these prepare their business plans on the understanding that they will be able to supply renewable energy systems under the LCBP - and ensure they have the requisite qualifications to guarantee this."

"Among my many concerns is the worry that limiting the market to just three suppliers will make pricing uncompetitive, cut off smaller businesses with many local links and established reputations and exclude manufacturers with better products and more in depth knowledge of the sector," comments Kyriakides.

This most recent development in the LCBP has brought a number of questions to the surface. In Kyriakides words: "In my letter to Alistair Darling I have queried what the benefits are of having such a limited number of suppliers. Personally I can see no advantage in it. I would also like to know how the government can justify this process as the best use of tax payers' money, particularly as this scheme is likely to encourage an anti-competitive marketplace. Lastly I cannot see how the exclusion of so many solar thermal businesses can possibly be positive for the sector in general - if the government want to encourage the widespread use of solar thermals, then jeopardising the financial stability of a large number of related businesses is surely not the best approach?"

With the government seemingly so keen to promote all aspects and consequences of climate change - and the importance of energy efficiency, the contradictory nature of this latest development leaves a wake of confusion. If the LCBP's ultimate goal is to encourage the use of solar thermal energy, then the government should be leading the battle for more market exposure and the encouragement of suppliers. Instead they seem determined to create an insular market dominated by those for whom solar energy is not a priority.

Mr Kyriakides indicates that to date he has not received a reply for the Department of Trade and Industry.

Related categories:  Energy management   Legislation and regulations   Solar heating 

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