Government makes concession on solar and biomass subsidies

Government will cut solar subsidies by less than planned and delay a decision on a biomass subsidy cut, it announced today.

As part of a new support package, ground-mounted solar installation systems with over 5MW of capacity will receive 1.6 Renewable Obligation Certificates (ROCs) per megawatt hour from April 2013, while building-mounted systems will receive 1.7 ROCs/MWh. 

The new support levels are higher than the 1.5 ROCs/MWh originally proposed by the Department of Energy and Climate Change (Decc), but less than the 1.8 ROCs/MWh the solar industry said was necessary to keep new projects in operation. 

The Solar Trade Association (STA) welcomed the extra boost for building-mounted systems but said the industry still faced a challenge. 

Paul Barwell, CEO at the STA, said: “[The deal] means that solar deployment could be overly constrained when, even with a fraction more support, it would still be cheaper than many other low-carbon technologies. It is difficult to understand why the government is aiming for ‘slow growth’ in this cost-effective technology when we have a challenging renewable energy target to meet.” 

The government also softened its stance on capping the amount of dedicated biomass plant that could expect to receive 1.5 ROCs/MWh before the subsidy is reduced. Instead, it said it would consult further when the 400MW trigger point was reached. In a statement, Decc said biomass projects supported under the ROCs could unlock investment decisions worth £600 million. 

Gaynor Hartnell, CEO of the Renewable Energy Association, welcomed the decision. She said: “Instead of implementing legislation that would have stopped investment in its tracks, Decc is taking more of a ‘wait and see’ approach, with the option of consulting if deployment exceeds 400MW. Today’s decision recognises the substantial contribution that these projects can make to delivering cost effective carbon savings and steady baseload output.”