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The renewables industry was bracing itself for a fight this week as the Department of Energy and Climate Change (Decc) threatened to scrap the Feed-in Tariff (FiT).
This would be the latest in a series of subsidy cuts for the renewables sector as the government seeks to rein its spending following the revelation it overspent on the £7.6 billion levy control framework (LCF) by £1.5 billion.
The small-scale solar industry, the largest beneficiary of the scheme, has called this latest review “alarming” and warned that it will be “hugely damaging” for the UK solar industry.
Decc has suggested it would close the FiT to new applicants by January 2016 if cost control measures are not implemented or prove to be ineffective.
These cost control measures include introducing new tariffs based on “fresh evidence” about the costs and rates of returns on solar, wind and hydropower technologies. This could see support for solar scaled back by up to 86 per cent, and some subsidies for onshore wind removed completely.
The Solar Trade Association’s head of policy Mike Landy said: “This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.”
Another option being considered by the government is whether a cap of up to £100 million should be placed on new FiT expenditure by 2018-19.
Renewable UK deputy chief executive Maf Smith slammed the plans, saying “it looks as if the long term vision has been lost” and that they are “damaging changes which undermine investment”.
Scottish Renewables senior policy manager Joss Blamire said the proposals are “quite simply terrible news” and that reducing support “so far, and so quickly, could be hugely damaging”.
Decc stated it is still considering removing FiT pre-accreditation to limit the impact on bill payers of deployment surges in smaller scale renewable technologies.
In the consultation, Decc said: “We are proposing measures to place policy costs on bills on a sustainable footing, improve bill payer value for money, and limit the effects on consumers who ultimately pay for renewable energy subsidies.”
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