Suporters of solar energy projects have hit out at proposed subsidy changes as set out by government today.
Friends of the Earth and solar energy trade association have both hit out at the government’s plans, which they say will threaten investment.
Government says it needs to cut subsidies offered to solar photovoltaic schemes because take up is growing faster than planned. It says the rapid increase in solar schemes threatens development of other renewable energy forms.
The Department for Energy and Climate Change has therefore proposed closing the Renewables Obligation scheme to new solar PV capacity above 5MW from 1 April next year. Its proposal includes grace period arrangements to protect developers who have already made significant financial commitments.
These projects will instead be able to apply for subsidy under the Contracts for Difference scheme. But STA said that CfDs are far less accessible for the SMEs that are prevalent in the solar sector.
The STA said the news came as “a crippling blow” to the future of an industry that has invested 12 months defining and disseminating good practice. It said the solar farm industry had brought costs down by 30% over the past two years, and that solar was on track to be the cheapest source of low carbon power by 2018.
Government said solar photovoltaic was an important part of the UK’s energy mix with 2.7GW of installed capacity in the UK. This is expected to grow to between 10GW and 12GW by 2020.
But it is concerned that too much of the growth is in stand-alone schemes as opposed to roof-top deployment, which the government would prefer.
It is also concerned that at current rates the subsidies due to stand-alone schemes will by 2017 exceed the budget available to pay them.