DECC plans to scrap solar farm subsidy will ‘undermine investment’

The Department of Energy and Climate Change (DECC) has confirmed plans to stop subsidies through the renewables obligation (RO) scheme for large-scale solar farms. The plans have received strong criticism for singling out solar and putting investment at risk.

Under the plans, solar farms that generate more than 5 megawatts (MW) in size will not be able to receive subsidy through the RO from April 2015. Instead, the industry is expected to use the new contracts for difference (CfD) scheme, which guarantees prices for energy suppliers for a 15-year period. However, using CfD will mean solar has to compete with other forms of renewable energy.

The proposals follow the government’s Solar Strategy, which was published last month. The strategy laid out plans to move the emphasis for growth in the solar market away from large-scale farms to commercial rooftops.

DECC said, “Today’s proposals are about ensuring the right balance of support for renewables and a smooth transition to the government’s new contracts for difference, securing the further investment we need to provide clean, green and secure energy, whilst continuing to deliver value for money for energy and billpayers.”

Founder and chief executive of renewable energy firm Good Energy, Juliet Davenport, said the company would be meeting with the energy secretary Ed Davey on Tuesday to voice its concerns about reducing support for large-scale solar projects.

She added, “[The proposals] will undermine growth, investment and jobs in a sector which is helping to introduce more competition and new players to the energy market. This decision will bring further instability and uncertainty to investors, and we will have to reconsider our portfolio of investments as a result.”

The Solar Trade Association’s CEO Paul Barwell has also commented that stable policy is needed for the solar market to grow.

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

Campaign groups Friends of the Earth and Greenpeace both accused the government of selecting fracking, despite concerns and public opinion, over renewables.

Doug Parr, Greenpeace UK chief scientist, commented, “The fracking industry makes wild claims about getting us off energy imports and gets everything it wants from government even though it’s locally unpopular and production is a decade away.

“Instead an industry like solar that enjoys strong public backing and is delivering electricity and jobs right now has to keep reacting to routine cycles of uncertainty and reviews.”

Photo: haak78 via Freeimages  

Further reading:

Changes to solar subsidies threatens jobs and investor confidence

Scottish solar industry reaches ‘significant’ 100MW milestone

Solar panels now on nearly 500,000 rooftops across UK

Government sets out plans for ‘solar hubs’

Public support for renewables grows as concerns over fracking rises