The solar industry has received another blow following the Government’s latest review of the Feed-In Tariff scheme. Despite no mention of cutting support for solar in the Conservative manifesto, the latest proposal recommends doing just that.
What will change?
From 1st January 2016, the Feed-In Tariff for small scale (domestic) solar installations could be reduced from 12.47p per kilowatt hour to 1.63p. There is also a possibility that subsidy schemes won’t be available next year for households interested in renewables.
The Solar Trades Association states that ‘other key changes that will affect the industry are:
- Some of the tariff bands are being changed.
- 0-4kW and 4-10kW are being merged
- 50-150kW and 150-250kW are being merged
- 250kW-5MW is being split into 250kW-1MW and 1-5MW.
- DECC is proposing forced degression each quarter, in the form of a tariff cap.
- Tariffs reduce to zero under domestic and standalone by 2019.
- Deployment-based degression will be maintained, and changed to 5% and 10%.
- A deployment cap per band: this means that no further schemes above the cap will obtain a tariff.’
How does the Government justify the cuts?
According to the Government, the huge interest and uptake of renewables could see an overspend of the allocated £7.6bn renewables budget. A DECC spokeswoman commented,
“We are taking urgent action to get a grip of this overspend and protect hardworking bill payers. Our support has driven down the cost of renewable energy significantly. As costs continue to fall and we move towards sustainable electricity investment, it becomes easier for parts of the renewables industry to survive without subsidies.”
Support was offered by Friends of the Earth’s Alasdair Cameron, who said of the proposed changes, “These absurd solar cuts will send UK energy policy massively in the wrong direction and prevent almost a million homes, schools and hospitals from plugging in to clean, renewable energy.”
The Government consultation is open for comments until 23rd October.
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