Commercial solar cuts less than feared

17th December 2015

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  • Mitigation ,
  • Generation ,
  • Fossil fuels


Sunny Pawar

Cuts to solar energy subsidies have been confirmed by the government, but are lower than originally proposed.

In a consultation earlier this year, the energy and climate department (Decc) proposed cutting the feed-in tariff for small commercial rooftops (10-50kW) from 10.9p/kWh to 3.69p/kWh. It confirmed today that the new rate would be 4.59p/kWh.

It had proposed cutting the rate from domestic solar by 87% to 1.63p/kWh, but has decided instead on a rate of 4.39 p/kWh, a 64% fall.

The decision comes after a campaign by the Solar Trade Association (STA), which was supported by other environmental groups, and organisations as diverse as the CBI and the Church of England.

Pre-accreditation has been reintroduced for all solar arrays above 50kW in size, which the trade association said would give organisations with large roof spaces more certainty when investing in solar.

The STA believes that the new commercial tariff will still be challenging, but said it hoped that increasing corporate commitment to acting on climate change would help to drive the market.

STA chief executive Paul Barwell said: "Commercial rooftop solar has been a small but growing part of the solar rooftop market. However, even with these lower tariffs, the nature of high electricity self-consumption and a maturing commercial market should ensure solar is still a good choice for many power-hungry businesses across the UK looking to reduce their bills and use the empty space on their roofs."

However, the government's impact assessment revealed that up to 18,700 solar jobs could still be lost as a result of today's changes. Several solar companies have already gone bust.

The government also confirmed today its decision to close the renewables obligation (RO) from 1 April 2016 to all solar projects, both rooftop and ground mounted. The obligation was gradually being replaced with the contracts for difference auction system but currently no decision has been made on future auction rounds for established technologies like solar.

This decision follows the government's decision last year to close the RO for solar projects bigger than 5MW in size.

The government has also confirmed its decision to end grandfathering for projects that do not meet the cut off date of July, which means there is no longer a guarantee that once a solar project is built the level of support will remain the same for the lifetime of the project.

The association said it will be working with government departments to look at further measures to improve the opportunities for solar power and establish a level playing field for the sector, for example by removing "red tape".

It particularly wants to see more regulatory incentives for solar on new build homes and businesses, and is pushing to remove EU import tariffs and price controls on solar panels from China. It is also pressuring the government to scrap plans to increase the rate of VAT on solar panels from 5% to 20%, which it has proposed in a new consultation.

The new tariffs will come into force from 8 February, and the deadline for projects to receive the current higher tariffs is 15 January.

Meanwhile, MPs voted by 298 to 261 in favour of allowing hydraulic fracturing of shale gas under national parks, areas of outstanding natural beauty , sites of special scientific interest, world heritage sites and groundwater protection zones. The government had originally pledged to protect such areas from fracking.


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