The future of UK renewables is in further doubt today, following the announcement of government plans to cut subsidies for electricity generated from rooftop solar panels by almost 90%.
Under the new proposals, feed-in tariffs could fall from 12.9p per kilowatt hour to 1.63p as early as January 2016. Adding to the concerns, energy secretary Amber Rudd has not ruled out scrapping the scheme altogether.
The proposals – which are also expected to hit small scale wind and hydro production – have been labelled “appalling” by green groups who say the move is “politically motivated” and “will take away power from people and hand it back to big energy firms”.
Industry insiders warned the short-sighted assault could kill off the UK’s fledging solar industry resulting in “wholesale collapse in solar take up by homeowners and businesses – just at a point in time when most other countries are escalating their solar deployment”.
RenewableUK’s Deputy Chief Executive, Maf Smith said:
What we needed in this Review was a clear vision for how we get to a point where cost effective, small-scale renewables are common-place, with all homes and businesses able to be part of a productive, vibrant low carbon economy. This Review is not about how we build that prosperous future but simply about short term politics and accounting.
The UK government’s justification for the announced subsidy cuts is full of holes.
The government’s own internal assessment warns that the latest policy rollbacks will significantly lower rates of deployment.
And while it continues to claim falling costs are making it “easier for parts of the renewables industry to survive without subsidies”, industry insiders warn that with “grid parity in its sights, the industry feels like it’s having its legs cut away metres from the finishing line”.
Under the proposed policies, they say, the cost of solar panels would now need to fall by over £800 for homeowners to see a return on their investment.
Philip Sellwood, chief executive at the Energy Saving Trust said:
We are as keen as the government to see solar panels being financially viable for homes without the need for the subsidy. But these cuts come too soon and are too sharp and there is little incentive now for the consumer. The Feed-in Tariff has been extremely successful in driving the uptake of solar panels in the UK which has helped PV prices to fall by nearly 70 per cent over the last five years.
The consultation marks an intensification of the government’s attack on clean energy solutions – including an end of subsidies for onshore wind, increased taxes on renewables and the closure of the UK’s flagship energy efficiency scheme.
But to date going backwards on renewable policy has just led to busting a booming industry.
The UK renewables industry is currently responsible for 112,000 jobs and £14.9 billion in economic gains.
By withdrawing support, and suffocating this growing industry, the Conservative government will not only undermine its own commitment to “cut emissions at the lowest cost”, but it could cost the country thousands of jobs and billions in investment, push up energy bills for UK households, and see it lose its role as a renewable energy leader.
Dr Doug Parr, Greenpeace Policy Director said:
The government cannot pretend cuts to subsidies for the nascent solar industry are necessary to save families money whilst throwing much more money at propping up polluting coal stations. The timing couldn’t be worse as the young and potentially booming solar industry is on track to go subsidy free but if these cuts happen, it will be too sudden, too soon and too dramatic. It is highly likely to irrevocably damage the domestic solar industry. The Treasury needs to get out of its 20th century mind set about backing coal and instead support new technologies and the sector that will provide jobs, lower emissions and create a secure future.
The UK is also risking its climate credibility at home, in Europe and globally.
According to the government’s own survey, public support for renewables remains high in the UK, backing up poll after poll which shows UK citizens want strong climate action.
Yet the UK is having to resort to dodging its EU energy targets and with the Paris climate talks just weeks away, green groups warn the latest rollbacks could see the country labelled a “hypocrite” on the international stage.
“This is politically-motivated, and will take away power from people and hand it back to big energy firms,” said Friends of the Earth energy campaigner, Alasdair Cameron. “Instead of championing fossil fuels, the Government should focus on developing the UK’s huge renewable energy potential. Policies like this will further undermine David Cameron’s credibility on climate change. World leaders meeting in Paris later this year will have every right to call him a hypocrite.”