Feed-in tariffs (FITs) that pay generators for supplying the National Grid with electricity from solar panels and wind and water turbines, could be the next of the Government's cuts.
The Department for Energy & Climate Change has begun a public consultation on FITs, partly as a result of “projected overspend” on the scheme and partly because it is required to review subsidy schemes every three years by the European Commission.
Under the scheme, generators receive a set ‘generation tariff’ for the electricity they produce and also an ‘export tariff’ for any extra units of energy they don’t use. This is not usually recorded accurately but it is simply assumed a certain proportion of the electricity generated is fed into the grid.
The department says that if it considers the scheme is unaffordable following the consultation it will propose ending generation tariffs to new applicants “as soon as legislatively possible”, which could be January next year.
The consultation document states: “This consultation sets out proposals for a fundamental review of the FITs, intended in the short term to control scheme costs effectively.”
Among the options being considered that could “build on or replace FITs” are continuing FITs as an export tariff-only scheme, removing the ability of new installations under the scheme to extend their capacity, and capping installations under the scheme to 12,000.
BSRIA is worried. Julia Evans, Chief Executive, says: “Ministers slashing these subsidies is yet another sign that the Government’s enthusiasm for green energy is waning. If implemented, such a step would remove virtually all incentive to install solar panels and could mean the end of Britain’s solar power boom."
In recent weeks, the Government has scrapped subsidies for onshore wind and commercial solar (the cheapest forms of clean energy), slashed the energy efficiency budget, abolished rules on zero carbon housing, lowered taxes on polluting firms, introduced a tax on clean energy and closed the £540million Green Deal. Energy-saving materials have also been singled out as no longer qualifying for reduced-rate VAT, although it was Europe that insisted on that.
"The government is giving me little confidence that it is taking the carbon reduction agenda seriously,” says Julia.