Subsidy cuts will hurt small solar farms, STA warns

Cuts to the Feed-in Tariff, which come into force today, will disproportionately hurt large solar roofs and small solar farms, the Solar Trade Association (STA) has warned.

As of Wednesday 1 July, any new small solar farms (under 5MW) built under the Feed-in Tariff (FiT)will get 28% less for every unit of electricity they generate, with the rate falling from 6.16p/kWh to 4.43p/kWh.

The cut will be disproportionately large for these projects thanks to a ‘hyperdegression’ in the tariff for ground-mounted solar.

The rules, as they stand, mean that the rate for ground-mounted solar projects is automatically cut if more than 17.5MW is installed under the subsidy scheme in any one quarter of the year. 

Almost 100GW was installed in the first quarter of 2015.

The STA has previously raised concerns that design of the FiT, means just a small amount of solar deployment can trigger a very large cut in the tariff.

“This means smaller solar farms, including those where ownership is shared with the local community, will struggle to get built going forwards,” warned the trade body.

Large scale roof projects (250kW+) will also reportedly face difficulties, despite just 70 projects being installed with FiT help since 2010. These projects are grouped together with the successful small-scale commercial roof market, whose subsidies are being cut thanks to the soaring number of installations.

‘No sense’

STA head of external affairs Leonie Greene said:“The Feed-in Tariff helps to democratise energy in the UK because it enables homes, businesses, schools, farmers, communities and big industry to invest easily in solar power.

“But some of the FIT cuts make no sense, particularly for large solar roofs on factories and industrial buildings, or for community groups looking to invest in a local solar farm.

“The industry still awaits clear policies from Government but Ministers have spoken positively about community solar schemes and larger solar roofs, so we very much hope the new Government will correct the FIT to boost these markets. We have set out how easy and cost-effective it would be to do that in our Solar Independence Plan.”

The STA plan claims that raising tariff bands and degression points could help deliver an extra 3.1GW of FiT-funded installations at no extra cost, achieving price parity by 2020.

Brad Allen

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