UK Cuts Subsidies to Big Solar

In the UK, the Department of Energy and Climate Change, or DECC, is planning to cut solar subsidies for all solar energy systems above 50 kilowatts.

UK ministers say they are instituting the cutback because a recent survey shows far too many utility-scale (1 megawatt or greater) projects in the pipeline are positioned to receive feed-in tariffs, or FiTs, and this would defeat the original purpose of the program, which was designed to stimulate small-scale solar energy projects on homes and small businesses.

In their newest proposal, the DECC has said it will pay just 8.5 pence (about 14 cents in U.S. dollars) for each unit of electricity produced by solar energy systems larger than 250 kilowatts. Original rates were set at about 30p.

Fortunately for entrepreneurs and their investors, the new rates are not retroactive?a fact which hasn?t put a smile on the face of utility-scale solar advocates like Gaynor Hartnell (head of the Renewable Energy Association, or REA), who says the curtailment is like ?pulling the rug out.?

Her statement is supported by a document the REA released describing the cutback as ?salami-slicing the sector? to fit the Treasury?s mandate. Nice alliteration, but not exactly on-message, since the cuts vary from 0 percent to 72 percent (for installations currently being planned in the southwest).

Hartnell was joined in protest by a number of environmental groups, one of which described the FiT cuts as ?horrendous.? Howard Johns of the Solar Trade Association called them a ?total disaster.?

The UK government continues to insist that the measure is necessary to protect subsidy funding for residential installations?a position supported by residential and small-business solar installers.

And, while FiT cuts will certainly strangle that portion of the solar industry vested in throwing up power plants which profit on government subsidies, it may well benefit distributed generation to such an extent that the loss (of clean, renewable power, over the next few decades) is negligible.

Photo Credti: OregonDOT via Flickr CC

Source: http://solar.calfinder.com/blog/solar-politics/uk-cuts-solar-subsidies/

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