Solar subsidy cuts spark job fears

 

A A A

The Government today unveiled plans for further cuts to solar subsidies, sparking concerns over the future of the industry and thousands of clean-tech jobs.

Energy Minister Greg Barker claimed the reforms to payments for small-scale solar would mean a bigger scheme that could deliver an "extraordinarily ambitious" 22GW of panels - the equivalent of 3.3 million installations for homes and businesses.

He insisted the changes would mean that the payments tracked the falling costs of solar technology, delivering value for money for consumers who pay for the scheme on energy bills and preventing another "bubble" in the industry.

But campaigners said the proposals to cut subsidies further, announced as the Government said it was pressing ahead with plans to halve the payments, would leave the solar industry "dead in a ditch", putting thousands of jobs at risk.

Ministers have previously warned the falling costs of technology made the payments too generous, causing too rapid a take-up of solar panels.

As a result, the feed-in tariffs scheme, which pays householders, organisations and businesses for electricity from small-scale renewables, has spiralled over budget.

Today the Department of Energy and Climate Change revealed the popularity of solar panels meant the £1 billion budget for the current spending period had been blown, and £1.7 billion was already committed to payments.

Mr Barker said the changes were about creating a scheme "for the many", which would deliver better value for consumers who pay for the subsidies on their bills and put solar on course to be a competitive alternative to fossil fuels.

He said the solar industry should "get real" over subsidies, adding: "I fully expect the industry to expand this year, and continue to expand, but on a sustainable basis not in short bursts of temporary workers."

He warned: "Never again must we have a fixed-price tariff that allows a bubble to grow."

Instead of letting the industry set its prices according to the subsidies, the new regime will track the falling costs of solar technology, he said.

Under the proposals, the already-planned halving of solar payments for new installations from March - or from last December if the Government wins a Supreme Court challenge over the issue - will be followed by further cuts in July.

Subsequent reductions which reflect falls in solar costs will be brought in every six months.

Decc estimates that the new system will deliver 620,000 new installations up until 2015 for £500 million, far less than the £1.7 billion cost of the 250,000 solar projects already installed.

Mr Barker said: "Our new plans will see almost two-and-a-half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry.

"We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long-term, predictable rate of return that will closely track changes in prices and deployment."

But Howard Johns, spokesman for the Cut Don't Kill coalition of solar businesses and environmental campaigners, said: "The Government's initial cut to the tariff was brutal, and this further cut will be utterly devastating for the UK solar sector.

"The hard facts are that a cut on this scale will leave the solar industry dead in a ditch, destroying tens of thousands of jobs and cutting off a green, high-tech British industry just as it starts to flourish.

"In their rhetoric, ministers claim to want a renewable future, but they are destroying the very businesses that can make that future happen.

"This whole proposal has been rushed and chaotic, and while ministers try to force it through arbitrarily, hard-working people are losing their livelihoods."

Decc said improvements had been made to the proposals for the subsidies in the future, including lowering the level of energy efficiency housing must have to qualify for payments, as the previous tougher proposals were "impractical".

And officials would be examining whether community and housing association projects should be exempt from a reduced rate for schemes which claim the tariffs for a series of installations.

The reduced rate aims to take account of the lower costs of bigger projects and curb excess profits made by companies who install panels on people's homes and then claim the payments while the householders see a reduction in bills.

Under the new plans unveiled today the rate will apply only to schemes with 25 or more sets of solar panels.

The Department also said the overspend on the budget will be met by money from underspending on large-scale renewable subsidies, for example for offshore wind.

Mr Barker, responding to a move this week by Conservative colleagues urging David Cameron to cut subsidies for onshore wind power, said while there were concerns about turbines in some locations, the Tories were enthusiastic about solar and decentralised energy.

But while a new consultation on other types of small-scale renewable, also published today, proposes raising the payments for micro-combined heat and power boilers, it also sets out plans to cut small-scale wind and hydro scheme payments.

Green MP Caroline Lucas said the new Lib Dem Energy Secretary Ed Davey should have delayed the solar policy change and got it right, warning that the proposals could see tariffs reduced as often as every two months.

"But today's announcement once again leaves the industry reeling, with tariff cuts going far deeper than the falling costs of installation warrant.

"While the Government sounds ambitious in its aims, the actual policy looks weak - with ministers giving themselves the option of changing the tariff every two months.

"The one thing that business needs is certainty, yet these Government cuts are being made so fast that it is destabilising the industry. The proposed tariff cuts also go deeper than the falling costs of installation should warrant."

PA

Have you tried new the Independent Digital Edition apps?
Sport
Louis van Gaal
football
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
music
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
music
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own