British homeowners are benefiting from the reductions in Chinese wholesale solar prices. This has enabled many homes in the U.K to reduce their carbon emissions. Unfortunately the influx of cheap panels has also damaged the European solar producers who struggle to compete.

The price of PV (photo voltaic) solar panels has dropped by as much as a third this year alone. This has had a huge impact on the returns available for home owners turning to solar.And there is a boom at present as consumers try to install the low-cost equipment before the level of handouts via the government feed-in tariff (FIT) is reassessed in April next year.

Solar Century, a larger London-based supplier that also assembles PV equipment, says a large amount of its equipment is imported from China.Britain has come late to the solar party with government ministers preferring in the past to concentrate on wind power and only fairly recently trying to stimulate demand by offering subsidies to solar users.

This has meant PV manufacture has been concentrated in countries such as Germany and Spain where harnessing the power of the sun has been encouraged for many years.The US, and more recently China, have gradually latched on to the growing global market for solar and have been setting up factories in double-quick time.But the very low labour costs – and allegedly the very cheap finance available from state-owned institutions – has rapidly propelled China into pole position in the production of solar equipment.

The rapid build-up in capacity in the Far East is playing a major role in driving down the cost of panels, but it is also being blamed for a crisis at many German and particularly American rivals.Whatever the reason for solar manufacturers losing out, it should be easy to see a winner: the British homeowner. But it is also tough for consumers deciding which panels they should buy knowing any producer could out of business and shred any 25-year guarantee along with it.