Government solar plans risk leaving industry with just £7million support over 3 years

As reported in The Times (paywall) newspaper today, new analysis from the Solar Trade Association has uncovered that the Government is planning on spending even less on solar over the next three years than many commentators originally thought.

In the Feed-in Tariff Review (FiT) consultation published by the Department of Energy and Climate Change three weeks ago, draconian cuts to the tariff for domestic solar of up to 87% are proposed, together with stringent maximum deployment caps.

The STA has conducted a detailed analysis of the Government proposals which shows they would result in a maximum of just £7million of support on new solar deployment under the Feed-in Tariff scheme from next year, over the next 3 years (2016-2018).

Spending will fall from a current run rate of less than £70million per year to £2million per year, or a 98% cut in the total budget.

The solar industry has had all other forms of support removed over the summer, and there is no clarity on future auction rounds for large-scale solar under the Contracts for Difference system.

This is out of a total low carbon energy budget called the ‘Levy Control Framework’ projected to be £7.6billion by 2020.

To put the £7million budget into context, that means that over the next three years 0.04% of the Levy Control Framework budget is being spent on new solar projects. As a comparison, £7million is less than Buckinghamshire County Council spends on potholes in a single year.

Paul Barwell, CEO of the Solar Trade Association, commented: “Allocating £7million of support for solar power – the world’s fastest growing clean energy solution – is absurd. This does not constitute a serious energy policy.”

“Solar can transform choice and competition in electricity markets, so the government’s short-term thinking on bills risks condemning hardworking families to a future of higher energy costs.”

“This 98% cut in support is extreme and will decimate the nation’s most popular source of energy, and puts at risk over 20,000 solar jobs. The UK will be left behind if we turn our back on a global solar revolution.”

“We have a plan to maintain a robust and growing solar industry and are keen to work with Government to find an effective solar policy that also delivers value for money. It is essential the Government rethinks its proposals – jobs and businesses are at risk.”

“Given how close solar is to being subsidy-free – which these cuts will delay – giving this vital technology one last push is clearly in the interest of consumers. Currently Government is set to trip its solar revolution up at the last hurdle, which makes no sense at all.”

Momentum is building behind efforts to urge the Government to rethink its plans for the Feed-in Tariff and solar energy. The Confederation of British Industry said last week that the “roll-back of renewables policies” was sending a worrying signal to businesses. The statutory Committee on Climate Change said that funding should not be withdrawn “too early”. Energy UK, the body that represents energy utilities, as well as other big business names such as DuPont have also called for the Government to “urgently reconsider” the proposals. The CEO of Shell recently said solar “will be the dominant backbone of our energy system”

Compare UK government policy to the Bank of England governor’s stark warning that climate change, caused by human activity, poses a huge risk to global stability. At a gathering of leading insurers at Lloyd’s of London, Mark Carney pointed out the rapid increase in weather-related catastrophes and the jump in both the physical and financial costs. He said the challenges currently posed by climate change “pale in significance compared with what might come”.