The rise and rise of UK solar could be over before it’s even really begun, after the Conservative government delivered what’s being variously described as a “one-two punch” or a “full frontal attack” to the renewable energy industry, mostly targeting subsidies supporting medium- to large-scale solar projects.
Using the all-too familiar justification that the cuts would help reduce household power bills, the Department of Energy and Climate Change said solar arrays smaller than 5MW would, starting April 2016, no longer receive the renewable obligation certificates (ROCs) which compel energy companies to buy power from them at a set price.
The government will also change the rules for pre-accredited feed-in tariffs (FiTs) so that smaller-scale developers, including those planning community or commercial rooftop solar projects, are no longer guaranteed what they will be paid for electricity they generate from a project before it is built.
This follows government cuts to onshore wind subsidies last month and to larger solar projects in April.
“My priorities are clear,” said UK energy secretary Amber Rudd. “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 subsidies. We’re taking action to protect consumers, whilst protecting existing investment.”
But just how much difference this action will make to consumer electricity costs varies greatly, depending on who you ask. Like in Australia, the Conservative government’s line is that renewable energy subsidies make up a significant proportion of household energy costs. Although they have reportedly since admitted these changes might save consumers just 50 pence a year.
Britain’s Solar Trade Association (STA), meanwhile, has estimated that the proportion of the renewable obligation taken by solar amounts to just £3 per annual bill.
The cost to the solar industry, however, could be great. As the Guardian reports, these mechanisms have been the major planks to provide certainty for investment, and their removal could undermine investor confidence in both large-scale and community solar projects
The government will also remove the guaranteed level of subsidy for coal or other fossil fuel power plants that switch to greener fuels such as biomass – a move it says could save £500 million a year from 2020 onwards.
Quoted in The Guardian, UK energy and climate expert, Professor Michael Grubb, described the announcement as a pivotal moment in UK energy policy that betrayed two conflicting ideologies.
“One is … pressing for strong international action on climate change, which signed an unambiguous cross-party pledge to phase out unabated coal, reiterated its carbon targets and which committed in its manifesto to deliver clean renewable energy as cost-effectively as possible.
“The other is a government which has moved to prematurely end supports for the cheapest of the UK’s main renewable resources, which has injected fear and uncertainty into renewable energy investors and which seems set to also scrap energy efficiency programmes which have helped to cut consumer bills and avoided the need for billions of pounds of new fossil fuel investments.”