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Renewables subsidy cuts 'threatening millions of pounds of investment'

Published 20/10/2015

It is thought the cuts could lead to job losses as well as a reduction in investment
It is thought the cuts could lead to job losses as well as a reduction in investment

Millions of pounds of investment in energy projects benefiting communities across the UK is at risk from the Government's cuts to renewables subsidies, a report warns.

A survey of 80 community energy groups with membership totalling 11,000 people revealed the vast majority (90%) said their developing projects were completely or partially at risk due to the proposed cuts.

The Government has announced plans to dramatically reduce subsidies for small-scale renewables projects such as solar panel arrays on the roofs of homes, schools and community buildings, claiming it is necessary to rein in spiralling costs on energy bills.

But the industry has warned the cuts to subsidies would lead to the loss of 27,000 jobs, with 1,000 already going as solar firms go out of business. The new research suggests it would also threaten some £127 million in investment.

The report found 38 Community Energy England (CEE) groups had received £7.4 million in "feed-in tariff" subsidies since the scheme began in 2010, which had brought in £50 million of private investment and generated £45 million for local economies.

They also generate community funds for schemes including advising people on fuel poverty, improving community buildings, providing computers for low income schools and improving wildlife areas and local healthcare services, the report said.

Some 20 schemes have created annual energy bill savings of £172,500 to schools, parish halls, churches and sports centres, the study by CEE found.

Projects at risk from the cuts include community solar and hydro projects in Cumbria, which will lead to the county losing out on at least £750,000 in investment.

And a scheme by Avalon Community Energy, in Mid-Somerset, should see its first phase to put solar panels on a school and industrial site go ahead but future plans have been "shut down dead", the co-operative said.

Barbara Stoll, Greenpeace energy campaigner, said the subsidies added just £6 a year on people's bills and solar was moving towards becoming subsidy free, and accused the Government of making a "political choice, not an economic necessity".

Emma Bridge, of Community Energy England, said community energy "reduces energy bills, provides energy efficiency advice, develops skills, generates revenue in the local economy, the list of social, economic and environmental benefits goes on".

"Community energy delivers value for money and this value for money will increase as the sector matures.

"The Government's proposed changes to the feed-in tariffs will seriously damage this vibrant and growing sector, making it far more difficult for communities to take control of the energy they use and the associated benefits that brings," she said.

The report comes as Energy Minister Andrea Leadsom is set to face questions on investor confidence in the UK energy sector from the parliamentary Energy and Climate Committee.

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