Subsidies for larger solar electricity schemes could be slashed under plans outlined by the government today, sparking outrage from the fledgling solar sector.
Ministers have said they are concerned about commercial “solar farms” benefiting from incentives designed to boost small-scale green electricity projects.
The feed-in tariffs (FITs) scheme pays people for the electricity they generate from small scale renewables installed on homes, schools and businesses.
But the government saidevidence showed dozens of large scale solar schemes were in the planning systemas companies bid to cash in on the incentives.
The Department of the Energy and Climate Change (DECC) has published proposals to significantly reduce the support for all schemes above 50 kilowatts (kW) - the equivalent of putting solar panels on 20 homes.
The rates would see the biggest projects paid just 8.5p for each unit of green electricity they produce, instead of more than 30p under the existing arrangements.
Mid-size schemes would also see their subsidies slashed by as much as half under the proposals put out for consultation.
Climate change minister Greg Barker said: “Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.
“I’m committed to an ambitious roll-out of microgeneration technologies as part of the coalition’s vision of a much more decentralised energy economy.”
He said the proposals would stop larger scale solar schemes “soaking up the cash” that should go to homeowners who install solar panels.
“The FITs scheme was never designed to be a profit generator for big business and financiers,” he said.
“The new tariff rates we’re putting forward today for consultation will provide a level of support for all solar PV and ensure a sustained growth path for industry.”
But Howard Johns, chairman of industry body the Solar Trade Association, said the review of solar subsidies was even more damaging to the sector than had been anticipated.
He said: “Given that just a week ago the UK government launched its own ‘Carbon Plan’ outlining how it will become the greenest government ever, this review is a complete disaster for the solar industry and comes at a time when we should be focusing on building renewables and harnessing the power of our natural resources.
“In one of the few low-carbon sectors that is increasing employment figures, strengthening an economy and offering prospects for the younger generation, it seems extraordinary that the coalition have decided to launch this consultation.
“Costs of solar are dropping and oil prices are rising fast, solar technology could easily meet a third of UK electricity needs.
“By announcing the FIT review, the coalition government has failed to show the solar industry the support that it pledged before it came into office.”
Gaynor Hartnell, chief executive of the Renewable Energy Association, said the government’s move, which she described as pulling the rug out from under the feet of those who had ventured into the market was “precisely the wrong response”.
“Larger PV projects are cheaper, and have a major role in driving down costs,” she said.
“The UK will return to the solar slow lane. It’s as good as a retrospective change and that does untold damage to investor confidence.
“It’s not acceptable and we will fight it.”
Environmental consultancy WSP Environment and Energy said the changes, designed to stop solar farms infields “carpeting” the countryside, would also damage large roof-top solarpanel schemes.
Chris Stubbs, director at the consultancy, said the reduction in tariffs would make many schemes unviable, while not saving the Treasury any money.
The proposals put out today also include slightly raising the support for producing energy from waste such as farm slurry, known as anaerobic digestion, following concerns that the existing subsidies are not enough to make schemes worthwhile.