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Plan to stop solar subsidies 'absolutely nonsensical' - green energy campaigners

Published 22/07/2015

There has been a fall in cost of delivering solar power, said Energy Secretary Amber Rudd
There has been a fall in cost of delivering solar power, said Energy Secretary Amber Rudd

Planned cuts to solar energy subsidies have been criticised as a "short sighted" move that will not lower energy bills.

The Government has announced proposals to close the subsidies scheme a year early in April 2016 for "small-scale" solar farms, which can be up to 25 acres in size, to save up to £100 million a year by 2020.

Changes have already been announced to close the subsidy scheme for the largest solar farms, above five megawatts (5MW), and for new onshore wind schemes.

Ministers are trying to grapple with a £1.5 billion overspend on the cap for subsidies to boost clean power by 2020, with spending expected to be £9.1 billion rather than the £7.6 billion limit.

The extra spending - due to changes in the wholesale price of power, more efficient technology such as wind turbines which generate more energy than expected and greater deployment of renewable schemes - is set to add an extra £18 to bills by 2020.

Consumers are already facing costs of around £92 on their energy bills by the end of the decade to pay for more low-carbon power, with the overspend pushing it to £110.

But the cuts to smaller solar farms will shave an estimated £1.20 off bills.

The Government's assessment also shows it would push up carbon dioxide emissions by 7.3 million tonnes.

Officials said the plans, which also include curbs for biomass power plants, are needed to rein in rising bills and control spending.

There will also be a review of the scheme that pays householders for solar panels on their roofs later in the summer.

Energy and Climate Change Secretary Amber Rudd said: "We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.

"Our support has driven down the cost of renewable energy significantly.

"As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidy.

"We're taking action to protect consumers, while protecting existing investment."

But critics said the proposals would put jobs at risk and undermine investment in renewables, while failing to reduce people's energy bills.

Daisy Sands, head of the energy campaign at Greenpeace said: "The proposals to stop solar subsidies that will save the average household about the same as a loaf of bread per year is absolutely nonsensical when comparing it to the 30,000 jobs and the investment in the UK economy that will be lost.

"This is a hugely short sighted proposal that will wipe out innovative community solar energy schemes but continue to pour money into subsidies and tax breaks for multinational energy giants like EDF.

"If the government is serious about keeping energy bills down, they would choose to slash subsidies and tax breaks for the oil, gas and nuclear corporations which have been propped up and polluting for decades."

Friends of the Earth energy campaigner Alasdair Cameron said: "This latest attack on the green economy will cast a long shadow over the UK solar industry, and undermine efforts to tackle climate change.

"This won't lower electricity bills - all new energy is being subsidised to some extent and solar is already cheaper than nuclear and will soon be cheaper than gas from new power stations."

Industry body the Solar Trade Association (STA) said the move would hit large rooftop schemes, which the Government has been keen to back, as well as solar farms.

STA head of external affairs Leonie Greene said: "There is no pledge in the Conservative manifesto about cutting support for solar, so we are disappointed by this move.

"Solar is the nation's most popular form of energy, as the Government's own opinion polls have shown."

She called for more efforts to unlock the potential of rooftop solar, which only accounts for a small proportion of the market.

"We also regret this move because solar farms are close to competitiveness with new gas generation," she said, continuing that s olar subsidies added just £3 to household bills at the moment,

The Government also announced plans to extend the "levy control framework" cap on subsidies past the current end date of 2020/21 to give investors the certainty they have been asking for.

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