Changes to renewable energy subsidies

Along with the Government’s recent announcement regarding the end of the Green Deal, other changes to renewable energy subsidies are in the pipeline. The Government claims this is due to a number of factors, including a huge uptake of the funding and incentives available to households keen to make their homes more energy efficient.

What the Government has to say

Amber Rudd, Energy and Climate Change Secretary, said, “My priorities are clear. We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.

“Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment”.
The Government justified the changes in its ‘Controlling the cost of renewable energy’ press release dated 22nd July 2015, ‘Reducing energy bills for hard working British families and businesses and meeting climate goals in the most cost effective way are Government priorities. The measures set out today will provide better control over spending and ensure bill payers get the best possible deal as we continue to move to a low-carbon economy.’
What changes can we expect?

As well as the end of the Green Deal, no further funding will be released for the Green Deal Home Improvements Fund. The fund is available to help with the installation costs of double, triple or secondary glazing, cavity wall, flat roof, floor and rooms in roof spaces insulation, as well as condensing mains gas boilers, replacement warm air units, fan-assisted storage heaters, waste water heat recovery and energy-efficient replacement doors.

There is currently £4m of funding available to those who apply before the 30th September 2015 deadline, however, the funding may run out sooner depending on the uptake.
The Feed-In Tariff, which enables affordable installation of solar panels and rewards households for the renewable energy they produce, is to be reviewed later in the year.
According to the press release, other measures include:

  • ‘Removing the guaranteed level of subsidy for biomass conversions and co-firing projects for the duration of the Renewable Obligation, known as grandfathering. This could reduce the risk of more allocations under the LCF (Levy Control Framework) by around £500m per annum in 2020/21.

  • Launching a consultation on controlling subsidies for solar PV of 5MW and below under the Renewables Obligation (RO). This includes consulting on early closure and removing the guaranteed level of subsidy for the duration of the RO, known as grandfathering.

The Government will also:

  • Set out totals for the LCF beyond 2020, providing a basis for electricity investment into the next decade.

  • Set out its plans in the Autumn in respect of future CFD allocation rounds.’

It will be interesting to see exactly what these changes mean to the renewable energy industry, households and businesses in the coming months.

If you’re considering building insulation or solar panels, get in touch to find out what funding and incentives are still available to help with the costs of installation and home improvements to make your property more energy efficient.