Any changes to support for large-scale solar farms in the UK would not come into force until the 2015/2016 financial year, according to the Department for Energy and Climate Change (DECC).
In a further appeasement to the booming UK industry’s angry response to news of a review, DECC also said those who had made “significant financial commitments” could be given a grace period to shield them from any prospective cuts.
In an email sent to senior industry figures and seen by PV Tech, DECC also said it hoped to make an announcement confirming the review next week.
“I have received a number of questions from around the sector asking whether any changes to the financial incentives, and in particular to the RO, would apply to this financial year,” the email from Trevor Raggatt, head of small-scale and emerging renewables at DECC said.
“I can confirm that the proposals on which we will be consulting are intended to take effect from the 2015/16 financial year. Additionally, we will be consulting on grace period arrangements to protect developers who have already made significant financial commitments,” the statement read.
“It had been our intention to publish a consultation related to the financial incentives this week and use the [solar] strategy group meeting as an opportunity to brief the sector. However, it has taken longer than anticipated for us to reach an agreement with colleagues across government on publication this week. We now anticipate publishing the consultation document next week.”
It emerged earlier this week that changes to support for large-scale solar would be considered in a formal review of support. This had been strongly hinted at in the recently published Solar Strategy, which not only talked up a shift towards mid-scale rooftop projects but also suggested the boom in solar farms was depleting the policy’s budget. The UK is set to eclipse Germany as Europe's largest solar markiet in 2014.
Given the generous support offered to the Hinkley C nuclear power plant for a term of 35 years last year, the veracity of the economic justification for solar cuts has been called into question.
The email also suggested that an announcement on the review had been delayed as its terms could not be agreed internally by the government.
Nick Boyle, CEO of UK developer Lightsource Renewable Energy said that unlike previous cuts to support, that fell in line with falling technology costs, it was hard to find the justification for a review at this stage.
“All of the other cuts were for a real reason; this cut scares me because there is no reason for it,” he said.
“This is a government that is supposedly technology agnostic. We cannot rollover and let this happen. There is no reason for this cut other than the threat of UKIP winning some seats perhaps,” he added.
Reza Shaybani, chairman of the British Photovoltaic Association (BPVA), said the way in which the review had been handle was “disappointing”.
“The news that DECC will be making changes to the financial incentives, and in particular to the RO, is extremely disturbing. This will have a major impact in the UK solar industry and frankly will damage the UK’s position as whole as a safe place for inward investment,” said Shaybani.
“I am particularly disappointed in the manner that DECC has handled the situation. The BPVA as the rest of the industry has been working hard in the strategy group set up by DECC to engage with the industry and to avoid these kinds of situations. As a minimum, DECC should have talked to the strategy group before making such decisions,” he added.
“We wait to see details of the proposed changes early next week and will plan our actions accordingly but this time the whole industry is united in dealing with any changes in policy which could harm the solar industry in the UK which are all very proud of,” concluded Shaybani.
Additional reporting by Peter Bennett.