Energy minister in charge of climate change has declared subsidies for solar panels will be scrapped to help reduce household electricity bills, The Telegraph reported.
Whitehall sources said a review of subsidy levels under the Renewables Obligation scheme would be announced within weeks and would likely propose cutting subsidies for ground-mounted solar farms while increasing those for solar panels on commercial rooftops.
The move follows Greg Barker, the energy minister, vowing earlier this month to curb the growth of solar farms, pledging he would not allow it to become “the new onshore wind”.
There has been a huge expansion in the number of solar farms over last two years, from 46 large-scale solar projects at the end of March 2012 to 184 at the end of February this year.
A further 48 were due to start operating in March and an additional 194 projects have planning permission and are awaiting construction, which can take as little as eight weeks.
Costs of solar panels have been falling and Whitehall sources say that a cut in subsidies is therefore justified.
Any changes to support for large-scale solar farms in the UK would not come into force until the 2015/2016 financial year, according to the Department for Energy and Climate Change.
DECC also said those who had made “significant financial commitments” could be given a grace period to shield them from any prospective cuts.
In an email sent to senior industry figures and seen by PV Tech, DECC also said it hoped to make an announcement confirming the review next week.
“I have received a number of questions from around the sector asking whether any changes to the financial incentives, and in particular to the RO, would apply to this financial year,” the email from Trevor Raggatt, head of small-scale and emerging renewables at DECC said.
“I can confirm that the proposals on which we will be consulting are intended to take effect from the 2015/16 financial year. Additionally, we will be consulting on grace period arrangements to protect developers who have already made significant financial commitments,” the statement said.
“It had been our intention to publish a consultation related to the financial incentives this week and use the [solar] strategy group meeting as an opportunity to brief the sector. However, it has taken longer than anticipated for us to reach an agreement with colleagues across government on publication this week. We now anticipate publishing the consultation document next week.”