UK government proposals to cut its feed-in-tariff (FiT) rates for solar PV installations by as much as 87% have shocked the solar industry, which is already reeling from a recent wave of potentially damaging policy proposals, according the UK's Solar Trade Association (STA).
The UK Department of Energy and Climate Change (DECC) is proposing deep cuts to support for all scales of PV system from 1 January 2016. It is also looking to enforce default degressions each quarter which would see FiT support for some scales of solar end on 1 January 2019.
The headline figure contained within the government’s impact assessment is that its proposals would wipe around 6.1GW from the UK’s renewables generation capacity by 2020/2021.
Mike Landy, head of policy at the STA, said the proposals were self-defeating – adding: “A sudden cut combined with the threat of scheme closure is a particularly bad idea – it will create a huge boom and bust that is not only very damaging to solar businesses and jobs but does nothing to help budget constraints.”
The STA is now calling on the government to work with the industry on a stable path towards reaching subsidy-free solar.
Leonie Greene, STA head of external affairs, said it was wrong to “push the industry over a cliff” just as it was closing in on repaying public investment through lower and more stable bills.
Landy said: “We need to see some positive proposals very quickly to mitigate the shattering of confidence across the solar industry.”
Reza Shaybani, chairman, British Photovoltaic Association (BPVA), said the proposals were “totally unacceptable” and “unnecessary” and would wipe out 95% of the solar industry in the UK, making it an “unsafe place for investment”.
He added: “Cutting the FiT for rooftop solar which reduces the energy bills for millions of homes and businesses is not defendable. The government promised to support solar on the roof but have totally acted against what was repeatedly said by senior government figures.”
The proposed caps would limit solar installations to about 22,000 annually and commercial installations to just over 100, he said.
Meanwhile James Court, head of policy and external affairs at the Renewable Energy Association, said rooftop solar has to be a key technology for a decarbonised future, by allowing consumers and businesses to gain control over the centralised energy market.
Referring to the DECC proposals, he added: “This is a phenomenally damaging and short sighted decision, which sets back this goal significantly and will lead to higher costs in the medium to long term.
“It is hard to see how homeowners or businesses could see solar as an attractive option for the foreseeable future following these disproportionate cuts.
“Solar has come down in cost so dramatically in the past five years and has grid parity in its sights, the industry feels like it’s having its legs cut away metres from the finishing line.”