Solar industry takes tariff fight to Lords

Solar industry campaigners have their last chance to save much-needed subsidies today as MPs 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 rethink of Government plans to slash the "feed-in tariff" (FiT) scheme barely more than year after it was introduced.

The committee could trigger a parliamentary debate and vote on the Government's proposals 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 Climate Change Committee last month backed new nuclear as the cheapest option for the green power Britain needs to hit its carbon-reduction targets. But the solar industry disputes the point, claiming that solar costs should be compared with retail 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. Plans to rejig the FiT will hike solar energy prices still further by pushing investment back down to smaller, less efficient installations, says E&Y.