Farming News - DECC cuts solar feed-in tariffs

DECC cuts solar feed-in tariffs


On Thursday, the last day before Westminster broke up for the Parliamentary recess, the government announced fresh cuts to support for renewable energy.

Just a week after senior ministers took part in high-level climate talks in Paris, and the day after MPs narrowly voted in favour of plans to frack for shale gas beneath National Parks, the Tories announced fresh cuts to solar feed-in tariffs.

Though the cuts are less severe than those initially proposed by ministers, there will still be a 65 percent cut in the price paid to those producing renewable energy from small-scale installations. Domestic-scale solar projects will have a feed-in tariff of 4.39p /kwh. The funds were initially established as a means of defraying the high costs of installing renewables, including solar panels.

In addition to the hit to support for small scale solar projects, subsidies for large-scale solar will be cut altogether from April next year. The cuts are intended to limit spending on the feed-in tariff scheme to £100m until the end of 2018/19.

Ministers did say they will reintroduce pre-accreditation for solar PV and wind generators over 50kW and all hydro and anaerobic digestion generators, which would offer confirmation of the level of support available for those installing these projects once they have planning permission. This element of the feed-in tariff was scrapped in the autumn, but is set to return next year.

Ministers at the Department for Energy and Climate Change (DECC) said the decision was taken to secure better value for money for bill payers and to avoid a projected over-allocation of renewable energy subsidies.

On Thursday, Energy and Climate Change secretary Amber Rudd said, “My priority is to ensure energy bills for hardworking families and businesses are kept as low as possible whilst ensuring there is a sensible level of support for low carbon technologies that represent value for money.

“We have to get the balance right and I am clear that subsidies should be temporary, not part of a permanent business model. When the cost of technologies come down, so should the consumer-funded support.”

However, campaigners, renewables industry leaders and opposition ministers have all condemned the cuts.

Responding on Thursday, Labour’s Shadow Energy and Climate Secretary Lisa Nandy said, “These short-sighted cuts will place big limits on our solar industry and lead to job losses. These cuts stand in stark contrast to the generous handouts Ministers recently announced to dirty diesel generators.

“At a time when energy bills are a big concern it makes no sense to limit one of the cheapest forms of clean energy.”

James Court, head of policy at the Renewable Energy Association (REA), said that pressure from the public and renewables industry meant the cuts announced this week were less severe, but that this offered “Small consolation” for those affected and still falls short of the lofty rhetoric government ministers used at Paris’ COP21 summit last week.

He praised the return of pre-accreditation, saying “The changes will help save some in the industry [though] it remains that many will be exiting.” He added that the terms announced on Thursday are better than they could have been and “may still provide the base to get to post-subsidy.”

However, Friends of the Earth spokesperson Alasdair Cameron was less forgiving. The environment charity spokesperson said that, despite some modest concessions, the government has “failed a major test of climate change credibility” after Paris.

Cameron continued, “Less than a week after [agreeing] in Paris to keep global temperature [rises] well below two degrees, the government has shown its true colours – and they’re certainly not green. These huge, misguided cuts to UK solar are a massive blow for jobs and the economy, and further undermine the government’s already tarnished credibility on tackling climate change.
 
“Massive public opposition to the government’s original proposal may have forced ministers to modify their plans, but this is still terrible news for the for UK and its small-scale renewables industry.
 
“It’s outrageous that the government continues to hand out billions of pounds in subsidies every year to climate-wrecking fossil fuels, while trying to block the clean energy sources we urgently need.”

More information on changes to feed-in tariffs and the Renewable Obligation is available from DECC here.