Calls for Government to 'urgently' stabilise UK solar sector amid subsidy closures
More than 200 stakeholders in the UK's solar sector, including energy companies, NGOs and city leaders, have called on the Government to continue an export tariff once the Feed-in Tariff (FiT) scheme ends next March.
In a letter to Energy Minister Claire Perry, members of the Solar Trade Association (STA) have urged ministers to confirm the extension of the export tariff, which enables small solar generators like households to sell unused renewable electricity back to the national grid, as a “matter of urgency”.
The export tariff is not a subsidy but was introduced alongside the FIT scheme, which has been one of the key factors contributing to the huge increase in solar photovoltaic deployment across the UK. Since the launch of the FiT scheme, solar capacity has grown from 100MW in 2010 to 12.7GW at the end of last year.
The letter, published today (30 August), claims that the closure of the export tariff would expose small solar generators to “very nascent markets that currently lack regulatory foundations”, putting them at risk of subsidising the commercial electricity sector without payment.
Signatories of the document include representatives from E.ON, Greenpeace and Friends of the Earth, alongside the leaders of York City Council, Portsmouth City Council and Oxford City Council.
“Such negative treatment will stifle the market, put off early adopters and give the wrong signals about grid interaction to consumers, thus slowing down UK progress towards a smart and flexible energy system,” the letter states.
“Instead, we urge you to ensure pioneering citizens have a positive experience of interaction with the grid so that public trust in a smart energy pathway can be firmly fostered.”
Specifically, signatories of the letter are calling for ministers to introduce an interim incentive for metered settlement from small generators next April, after the Business, Energy and Industrial Strategy (BEIS) department's confirmation that FITs would not be replaced.
They have additionally recommended a re-think of current solar policies, which they claim could discourage more than 800,000 existing solar homes from installing battery storage and smart meters.
A BEIS spokesperson said: “This scheme has been hugely successful, outstripping our predictions and generating enough electricity for two million homes. But it’s only right we protect consumers from costs and adjust incentives as costs fall.
“We are world leaders in renewable energy and since 1990 have cut emissions by more than 40% and are committed to continuing to lead the world in renewables. The Government is investing more than £2.5bn on low-carbon innovation by 2021 and is seeking views on the challenges and opportunities from small-scale low-carbon generation in contributing to government’s objectives for clean, secure, affordable and flexible power.”
STA’s chief executive Chris Hewett said the aim of the letter was not to request a subsidy, but to champion the “fair treatment” of householders, small businesses, farmers, community energy groups and community buildings that want to invest in renewables.
“The latest Government proposals for solar power are creating shockwaves well beyond the solar industry,” Hewett said.
“Nobody can fathom how Government can contemplate leaving households and small organisations as the only generators left unpaid for the valuable power they put into the electricity network. It is not too late for some really positive policies given the potential of smart homes and businesses to save the system and our economy billions of pounds compared to business as usual.”
Responding to the letter, a BEIS spokesperson said the FiT scheme has been "hugely successful, outstripping predictions and generating enough electricity for two million homes".
“We are world leaders in renewable energy and since 1990 have cut emissions by more than 40% and are committed to continuing to lead the world in renewables," the spokesperson added. "But it’s only right we protect consumers from costs and adjust incentives as costs fall."
The letter comes shortly after London Mayor Sadiq Khan penned a similar request to Perry, claiming he was “deeply concerned” that Government proposals to end the FiT scheme would hamper his own efforts to boost deployment of solar technology in the capital.
According to the Government consultation, the FiT scheme has achieved an ambition to support the deployment of small-scale (5MW or less) renewable technologies.
The Government claims that installations and installed capacity have exceeded expectations, and has said that its decision to close FiTs is partly based on the emergence of subsidy-free solar projects.
The country’s first subsidy-free solar farm in Bedfordshire, for example, is co-located with a 6MW battery storage facility, while a business park in Buckinghamshire is set to generate more solar than it consumes, once the nation's first subsidy-free industrial solar installation is completed on the site.
Research suggests that Britain is on course for a subsidy-free renewables "revolution" that could add 18GW of new capacity by 2030 and attract £20bn of investment.