The Government has been accused of undermining a “key source” of clean, home-grown energy with changes to the subsidies for solar farms.
Support for new large scale solar farms under the existing “renewables obligation” would be stopped from April next year, two years before it ends for other renewable technologies, as part of proposals published for consultation today.
The Department of Energy and Climate Change (Decc) said the move was necessary because the solar farm sector has been growing faster than expected.
Without changes, more solar could be deployed than is affordable under the system of subsidies for renewables, which are paid for from consumer energy bills, Decc said.
Solar farms, which cover fields or other areas of ground in panels to generate electricity from the sun, can be controversial because of their visual impact on the countryside.
The Government wants to focus its support towards deploying more solar panels on the top of industrial and public sector buildings, which it says provides benefits such as more jobs and lower energy loss than solar farms.
A Decc spokesman said: “Solar photovoltaics is an integral part of the UK’s energy mix and we want to see this success story continue. Our recent Solar Strategy will ensure we remain a leading destination for investment and deployment of solar energy.
“As renewable technology matures and costs come down it is right those savings are passed on to consumers.
“Our ultimate goal is for renewables to be competitive with other forms of electricity generation and we will balance government support with the need to provide value for money to consumers and bring on essential new investment.”
But the solar industry and environmental groups accused the Government of singling out solar farms for unfair treatment and of threatening jobs and investment in renewables by creating new uncertainty with policy changes.
The Solar Trade Association (STA) said solar had been on track, before the changes, to be the cheapest source of low-carbon power by 2018.
The amount of solar farms currently installed would make up just 5% of next year’s subsidy budget, and even if the amount installed doubled this year, it would still account for just 9% of the budget, the association said.
Under proposals for the new system of support, renewable power developers will have to bid against each for subsidies in auctions, which would disadvantage smaller businesses such as solar companies, the STA said.
The move to curb solar farm development comes just weeks after the announcement that the Tories would scrap subsidies for onshore wind farms if elected in 2015.
Recent research for Decc found that 85% of people supported solar developments and 70% backed onshore wind, while fracking for shale gas – which is supported by senior ministers – garnered just 29% support from the public.
Greenpeace UK chief scientist Dr Doug Parr said: “Solar is hugely popular in the UK, costs are falling faster than for any other energy source, and the latest technology is on track to beat nuclear on price.
“Sowing uncertainty for a key source of clean, homegrown energy, as ministers are doing, makes no economic, political, or strategic sense.
“The fracking industry makes wild claims about getting us off energy imports and gets everything it wants from Government even though it’s locally unpopular and production is a decade away.
“Instead an industry like solar that enjoys strong public backing and is delivering electricity and jobs right now has to keep reacting to routine cycles of uncertainty and reviews.”
Friends of the Earth Energy Campaigner Alasdair Cameron said: “This review shows that the Government’s renewables strategy is in some disarray and struggling to catch up with developments.
“Every time a renewable energy technology starts to do well it gets hit by a wave of Government uncertainty, which pushes up costs and threatens jobs and investment.
“Attacking large-scale solar parks, while doing almost nothing to boost rooftop systems, is another sign of this Government’s piecemeal approach to policy making.
“UK renewables should be the cornerstone of future UK energy policy – not fracking. But yet again the Government has totally underestimated its potential.”
Juliet Davenport, founder and chief executive of Good Energy, said: “The solar sector needs a stable policy framework from which to grow – we believe if properly supported now, it could compete equally on cost with other technologies by the end of this decade.
“What it does not need is revised levels of support and political uncertainty, which will serve only to stifle investment, growth, competition and ultimately, the opportunity to make a meaningful low-cost, low-carbon contribution to the UK’s longer-term energy security.
STA chief executive Paul Barwell said: “We had forecast solar could be cheaper than onshore wind by 2018, but for this to happen we needed stable policy sustaining a high-volume market. The Government is actually moving to slow down solar’s cost reductions towards grid parity.
“The industry will be alarmed by these proposals and surprised to be singled out for harsh treatment. It does look like the Government is seeking to define the energy mix and hiding behind the false excuse of ’budget management’.
“If these proposals go through they will knock the industry’s extraordinary progress back, and actually reduce healthy competition in the renewables sector.”
Seb Berry, solar company Solarcentury’s head of public affairs, said: “Today’s announcement is unnecessary and totally at odds with the Government’s desire to reduce the cost to energy bill payers of delivering the 2020 renewable energy target.
“Following close behind recent unhelpful media coverage of onshore wind policy, this policy proposal will undermine investor confidence in the entire UK renewable energy sector, by removing at a stroke the short and medium-term policy certainty required for major project investments.”
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