U.K. Confirms Solar Cuts

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The U.K. government has introduced lower-than-expected subsidy cuts for solar photovoltaic (PV) projects and delayed their implementation until August 1.

The move brings some solace to the depressed solar sector, which has been battling the government over the scale and timing of its severe reductions to the Feed-in-Tariff (FiT) since last year. Originally, the new cuts were expected to come into effect from July 1 but the government missed the deadline for introducing them to parliament. For additional information, see May 22, 2012, article - Government Delays Solar Cuts in U.K.

The government claimed that the new tariff scheme and other proposals puts the "FiT scheme on a more predictable, certain and sustainable footing for householders, businesses and the solar industry".

The Department of Energy and Climate Change (DECC) stated that projects from 10-50 kilowatt (kW) will get £0.13.5p per kilowatt hour (kWh), 50-150kW installations will receive £0.11.5p/kWh, while larger projects measuring 150-250kW will be entitled to 11p/kWh. Smaller, domestic solar installations under 4kW will receive £0.16p/kWh, down from £0.21p -- a drop of almost a quarter.

The government reserves the right to cut the FiT every three months by 3.5%, from November, if installations range from 200-400 megawatts (MW) in the previous three months. If there's more than 400 MW installed in three months the cuts will jump as high as 28% but if there's less than 200 MW installed in the same period, any cuts will be frozen. The payback period for businesses and householders was reduced from 25 to 20 years but electricity sold to the grid will receive a higher price of £0.4.5p/kWh, up from £0.3.2p/kWh.

"Today starts a new and exciting chapter for the solar industry," claimed Energy and Climate Change Minister, Greg Barker. "The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector. We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain's clean energy economy."

The government's more lenient approach has been generally welcomed by the solar industry.

Alan Aldridge, Chairman of the Solar Trade Association said: "We broadly welcome many of the Government's decisions for how solar PV will be treated in the FiTs scheme and wholeheartedly welcome the inclusion of solar in DECC's updated Renewables Roadmap; this should reassure consumers and solar companies alike that the Government recognises and stands behind a major role for the solar industry. Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable".

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