Solar subsidy changes: Industry reaction

The Government has been accused of having 'an unjustified bias against solar and decentralised energy' after revealing controversial plans to cut financial support for solar farms.

As reported by edie earlier today (13 May), the Department for Energy and Climate Change (DECC) officially launched a review of solar subsidies, proposing that 5MW+ solar farms will no longer receive financial support through the Renewables Obligation (RO) scheme as of next April.

We’ve since heard from a number of leading renewable energy organisations – all of which are ‘alarmed’ and ‘disappointed’ by today’s announcement. (View the full consultation document here).

Solar Trade Association (STA)

Paul Barwell, chief executive of the STA, said: “The costs of solar power have kept on falling, in large part thanks to the growth and learning in our successful UK industry. We had forecast solar could be cheaper than onshore wind by 2018, but for this to happen we needed stable policy sustaining a high-volume market. The Government is actually moving to slow down solar’s cost reductions towards grid parity.

“The industry will be alarmed by these proposals and surprised to be singled out for harsh treatment. It does look like the Government is seeking to define the energy mix and hiding behind the false excuse of ‘budget management’.

“DECC challenged us to work with communities to ensure solar remained popular as the large scale sector developed, and we’ve done just that. With our ’10 Commitments’ good practice guidance published last summer, and the National Solar Centre’s biodiversity best practice guidance just last week, the sector has developed high standards and a legacy to be proud of – public support for solar and large scale renewables is the highest it’s ever been.

“Today’s proposals are no just reward. If these proposals go through they will knock the industry’s extraordinary progress back, and actually reduce healthy competition in the renewables sector.”


Seb Berry, Solarcentury’s head of public affairs, said: “Today’s announcement is unnecessary and totally at odds with the government’s desire to reduce the cost to energy bill payers of delivering the 2020 renewable energy target.

“Following close behind recent unhelpful media coverage of onshore wind policy, this policy proposal will undermine investor confidence in the entire UK renewable energy sector, by removing at a stroke the short and medium-term policy certainty required for major project investments. It is very surprising that such a deeply damaging policy proposal has been cleared by the Treasury.

“It is equally surprising that the government is trying justify this proposal on cost grounds. Large-scale solar is already significantly cheaper than offshore wind and will be competitive with onshore wind by 2017. In deliberately setting out to strangle the growth of cheaper solar from 2015, Secretary of State Davey can no longer claim that government policy will deliver the most cost-effective mix of technologies by 2020.

“It’s extremely disappointing that these RO proposals were not tested out first privately with senior industry representatives in the Minister’s top level solar strategy group, which includes Solarcentury. The reality is that large-scale solar PV in the UK is one of, if not the major success stories of coalition green energy policy since 2010, but now the outlook beyond the end of this financial year is extremely uncertain.”

Friends of the Earth

Friends of the Earth energy campaigner Alasdair Cameron said: “This review shows that the Government’s renewables strategy is in some disarray and struggling to catch up with developments.

“Every time a renewable energy technology starts to do well it gets hit by a wave of Government uncertainty, which pushes up costs and threatens jobs and investment. Attacking large-scale solar parks, while doing almost nothing to boost rooftop systems, is another sign of this Government’s piecemeal approach to policy making. Solar power is cheap, popular and essential for tackling climate change and energy security.

“UK renewables should be the cornerstone of future UK energy policy – not fracking. But yet again the Government has totally underestimated its potential.”

Good Energy

Juliet Davenport, founder and chief executive of Good Energy, said: “We will be meeting the Secretary of State today to set out our concerns about any reduction in support for larger scale solar projects. We believe the government should be providing solid, stable support for such developments and not disadvantaging this growing sector.

“Today’s announcement from DECC is therefore very disappointing. This will undermine growth, investment and jobs in a sector which is helping to introduce more competition and new players into the energy market.

“Solar offers the opportunity for diversifying investment away from the traditional big six, bringing with it the potential for job creation and further investment. Solar developments also help the growth of small-scale new generators as well as communities who want to generate their own clean energy, have viable alternatives to the big six and reduce their energy bills.

“The solar sector needs a stable policy framework from which to grow – we believe if properly supported now, it could compete equally on cost with other technologies by the end of this decade.”

So, what do you think? Do you understand DECC’s concerns that large-scale solar farms would exceed their available budget under the RO scheme? Or do you agree that these proposals will knock the industry’s progress and reduce competition in the renewables sector? Leave a comment below or get in touch via Twitter to let us know your thoughts.

Luke Nicholls

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