Solar industry takes tariff battle to House of Lords

Solar industry campaigners have their last chance to save much-needed subsidies today as lawmakers meet to decide if the Government's controversial cuts warrant a debate in the House of Commons.

The Merits Committee, chaired by Lord Goodlad, is to consider a letter co-signed by some 58 organisations and businesses – including the Solar Trade Association, the Co-operative, and the Town and Country Planning Association – calling for a re-think of Government plans to slash the "feed-in tariff" (FiT) scheme barely more than year after it was introduced.

If the committee votes to draw "special attention" to the concerns outlined in the letter, it will trigger a parliamentary debate and vote on the Government's proposals branded "nonsensical" and "a horrendous strategic mistake" by the irate solar industry.

The proposed changes to cut the subsidy rates available to solar power projects of more than 50 kilowatts (kW) – roughly the size of a hospital or housing association scheme – by between 38 and 70 per cent. If the changes go ahead the industry argues it is unlikely any projects of more than 50kW will be built.

Much of debate centres on the comparative cost of solar power. A report from the independent Climate Change Committee last month backed new nuclear reactors as the cheapest option for the green power Britain needs to hit ambitious carbon-reduction targets. But the solar industry virulently disputes the point, claiming that solar costs should be compared with retail rather than wholesale prices, because of the scale of the technology.

A report from Ernst & Young yesterday suggests that solar will compete with retail grid prices as soon as mid-2012, if current subsidy levels are maintained, rather than the mid-2016 "parity" point with wholesale costs.