Solar industry uproar over plans to slash subsidies

Britain's solar industry was in uproar yesterday, branding the Government's proposed changes to the feed-in tariff (FIT) subsidy scheme as "nonsensical", "disgraceful" and "a horrendous strategic mistake".

The furore over the future of the nascent solar photovoltaic sector – which one industry group described as "strangled at birth" by the changes – comes against the backdrop of growing concerns about plans for new nuclear power stations given the crisis in Japan.

Under the new proposals, the solar power subsidies will come down by around half for medium-sized schemes, and by two-thirds for the biggest installations. The changes are now open for consultation, with a view to taking effect in August.

The Government says the move is necessary to avoid extra-large commercial solar "farms" hogging all the available funding and squeezing out the domestic projects for which the scheme was intended. It also says that solar costs have dropped 30 per cent since the FIT was introduced last April.

But solar power companies said that any scheme larger than a few households is now completely unviable. "This is far worse than anticipated," Ray Noble, the solar specialist at the Renewable Energy Association, said. "This industry has been strangled at birth."

Critics claim the changes betray a fundamental misunderstanding of the industry, which needs large-scale schemes to bring down the cost of smaller projects. And the cost model used by the Government is based on fossil fuel price projections that are wildly out of kilter with reality, they claim.

West Oxford Community Renewables, a social enterprise which has set up solar panels on a local school and supermarket, says plans for another school scheme nearby will now not go ahead."The Government came in saying they are all about the Big Society, but this is big government writ large," Barbara Hammond, the chair of West Oxford Community Renewables, said.

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