The UK’s Department for Energy and Climate Change (DECC) has announced today that it wants to scrap its Renewable Obligations (ROCs) subsidies for sub 5MW solar farms from April 1, 2016, one year earlier from what was originally planned. Other changes include the removal of pre-accreditation from the Feed-in-Tariff (FiT) scheme for PV installations larger than 50 kWp.
What has been in the last few days only speculation and rumors has been confirmed on Wednesday by DECC. Energy Secretary Amber Rudd (Conservative Party) claims that the changes were necessary to ensure British consumers do not end up paying higher energy bills”. “My priorities are clear,” Rudd said. “We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way”. According to Rudd, “Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re talking action to protect consumers, whilst protecting existing investment”. DECC also cites “higher than expected uptake of the demand-led FiTs and the RO” as well as a “faster-than-expected advancement in the efficiency of the technology”.
On the other end, the UK solar industry has sharply attacked the government, accusing it of “effectively punishing a technology for being cheaper, more efficient and more popular than expected”. according to the UK’s Solar Trade Association (STA), solar PV accounts for just 6% of the funds paid out under the ROC scheme. STA has previously offered to work hand in hand with DECC to render the FiT scheme more efficient for government spending. The STA told BBC on Wednesday that these cuts “will have a large impact on the U.K.’s solar industry”, after being the most dynamic in Europe last year and having already enjoyed rapid growth this year. According to the STA, “The RO is costing about three pounds per annum on people’s energy bills – it’s a tiny amount when you compare it with other types of energy, like nuclear for example”.
Announced measures by the DECC regarding PV
In details, the DECC is:
- Launching a consultation on controlling subsidies for solar PV of 5MW and below under the Renewables Obligation (RO). This includes consulting on early closure and removing the guaranteed level of subsidy for the duration of the RO, known as grandfathering.
- Launching a consultation on changes to the preliminary accreditation rules under the Feed-in Tariff (FIT) scheme followed by a wider review of the scheme to drive significant further savings.
The DECC will also set out its plans in the Autumn in respect of future Contratcs for Difference (CfD) allocation rounds. Many actors fear that there will be no more CfD auction rounds at all.