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DECC proposes solar subsidies cuts

The government has published its scheduled review of the Feed-in Tariff scheme for supporting small-scale renewables, including solar PV.

The proposals set out by the Department of Energy & Climate Change (DECC) will see rates for domestic schemes, or those up to 10kW, cut from 12.9p today to 1.63p/kWh in January 2016.

New Tariff bands Current rate (Oct-Dec 2015) p/kWh New proposed rate from Jan 2016 p/kWh
0-10kW 11.30-12.47 1.63
10-50kW 11.30 3.69
50-250kW 9.21-9.63 2.64
250kW-1MW 5.94 2.28
1MW-5MW 5.94 1.03
Standalone 4.28 1.03

 

Other changes that will affect the industry include some of the tariff bands being changed:

  • 0-4kW and 4-10kW are being merged;
  • 50-150kW and 150-250kW are being merged; and
  • 250kW-5MW is being split into 250kW-1MW and 1-5MW.

There will also be a deployment cap per band, which means that no further schemes above the cap will obtain a tariff.

Solar Trade Association (STA) head of policy Mike Landy said: “We don’t agree with these self-defeating proposals and will be urging DECC to take up our alternative.

“A sudden cut combined with the threat of scheme closure is a particularly bad idea – it will create a huge boom and bust that is not only very damaging to solar businesses and jobs but does nothing to help budget constraints.”

The STA published its Solar Independence Plan for Britain in June, setting out proposals based on a detailed budget model of the solar Feed-in Tariff.

It estimates that it will cost another £1.70 per year on energy bills between now and 2020 to deliver a million more solar homes and grid parity.

Polling by the DECC shows solar is the UK’s most popular energy technology.

PassivSystems chief executive and founder Colin Calder said the failure to deliver reliable and effective renewable energy policies was driving up costs for hard-working families, demonstrating the government’s inability to make long-term value for money decisions that benefit consumers.

“Free rooftop PV was providing low-cost energy to tens of thousands of hard-working individuals categorised as living in fuel poverty,” he added.

Some argue the government is missing the bigger picture. WWF-UK generation specialist Rebecca Williams said investors needed to know that the UK wanted to be a part of the global transition to renewable energy.

She said the government must set out a positive plan for renewable energy in the country to encourage investment, create jobs and to have a credible voice at the Paris climate change talks in December.

The deadline for responses to the consultation is 23 October.

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