Solar and onshore wind will compete for a share of US$85 million a year under the new contracts for difference (CfDs) scheme, according to a document published by the UK Department for Energy and Climate Change (DECC).
Established technologies, which include solar PV, onshore wind, hydro and landfill gas, will compete for an annual budget of US$85 million in the first auction round, with contracts lasting 15 years. Bidding for 2015/16 will begin on 14 October 2014.
The final budget will be announced on 29 September. DECC has indicated that the second auction round in autumn 2015 will also comprise of a US$85 million annual budget for established technologies.
The Solar Trade Association (STA) estimates that if all of the US$85 million budget is used by solar that would represent around 1GW of new capacity – a number the association describes as a “considerable reduction on the current market”.
In 2013, 1.45GW of large-scale solar was installed in the UK.
The STA also stressed that the US$85 million per year budget allocation is miniscule when compared to the US$2 billion that will be paid out to eight CfD projects in 2020-21, which includes five offshore wind projects.
Reacting to the news, Leonie Greene, head of external affairs at the STA said: “The message the government is sending out today is clear. It is backing nuclear and other more expensive renewables over value for money solar. It is clear that the government is favouring more expensive technologies over solar.”
Looking ahead, Greene added that the solar industry must keep making the economic case of solar to the government in an attempt to secure more budget.
“The solar industry is not asking for special treatment – just a level playing field for solar and for small businesses, who provide much needed competition,” said Greene.
On Wednesday, the EU gave state aid approval to the policy calling it a “fine example of how to promote the decarbonisation of the economy with market-based support”.