No more ‘blank cheque’ for green energy as solar subsidies cut

The Department of Energy and Climate Change (DECC) is consulting on plans that would see subsidies for some small-scale new solar farms close by 2016. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies.

The Government has launched a consultation on proposals to end support for solar PV of 5MW and below under the Renewables Obligation (RO) subsidy scheme from April 2016.

Commenting on the rumours, Daisy Sands, Greenpeace Head of Energy campaign, said the government looks “set to destabilise the booming solar industry”.

We’re hearing a lot of big figures from Government, but they should know it is just a few quid more on energy bills to deliver nothing less than a solar power revolution in the UK.

The proposals would stop solar farms with less than 5 MW of capacity accessing the RO subsidy scheme from April next year.

“Support for solar under the Renewables Obligation now costs just £3 per year on each household bill and solar on makes up only 6% of the Renewables Obligation budget”.

“The government has stripped away without warning incentives for projects on which many companies have made major investment decisions in renewable technologies”, said Richard Kirkman, technical director at Veolia United Kingdom, a subsidiary of French environmental services group Veolia.

“We can’t have situation where industry has a blank cheque, and that cheque is paid for by people’s bills”, Ms Rudd said.

Measures announced Wednesday included the removal of guaranteed subsidies for biomass projects and solar projects created to generate less than 5 megawatts of power. Neither are we busting energy bills; solar at all scales will add around £10 to bills this year.

Ms Rudd said: “We cant have a system where there is basically unlimited headroom for new renewables including solar”.

The privatisation has been called reckless by critics, such as Green party MP Caroline Lucas.

“While the Government continues to subsidise fossil fuels and nuclear, it’s undermining investor confidence in clean, renewable energy generation”. However, think tank Policy Exchange has said the current overshoot could add a further £20 to household energy bills in 2020 through so-called “green levies” and Ministers are understood to be keen to tighten controls on the budget to prevent further upward pressure on bills.

Due to the deployment-based degression method, the change in pre-accreditation could hit the rooftop solar market the hardest given the typically long lead times required for such projects.

“It is galling when tax breaks and subsidies have propped up the oil, gas and nuclear industries for decades”.

The Solar Trade Association’s head of external affairs Leonie Greene said: ‘This is damaging for big solar rooftops as well as solar farms, both very cost-effective ways of generating solar power.

Mr Whitehead said: “The government appears to be putting its eggs in more expensive baskets while taking the eggs out of the cheaper baskets in order to fund the more expensive baskets with what is happening with onshore wind and solar”.

Critically, DECC is also proposing to end “grandfathering” within the scheme from now on, the guarantee that a certain level of subsidy will be provided throughout the lifetime of a solar farm once built, STA notes.