BSRIA is disappointed that feed-in tariffs (FITs) that boost solar panel schemes could be the next green subsidy to be axed, according to a new government consultation. The Department for Energy and Climate Change has begun a public consultation on FITs, due to “projected overspend” on the scheme and partly because it is required to review subsidy schemes every three years by the European Commission.
The scheme allows households to claim money from energy suppliers if they generate their own electricity through renewable sources, most popularly used through solar panels, but also through wind turbines. Under the scheme, households receive a set ‘generation tariff’ for the electricity they generate, and also an ‘export tariff’ for any extra units of energy they don’t use, currently set at 4.77p per unit of electricity.
The department says that should it consider that 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.
Julia Evans, Chief Executive, BSRIA, said: “Ministers slashing these subsidies for solar panels is yet another sign that the Government’s enthusiasm for green energy is waning. If implemented, such a step would remove virtually all incentive for home owners to install the panels and could mean the end of Britain’s solar power boom.
In recent weeks, government has scrapped subsidies for onshore wind and commercial solar – the two cheapest forms of clean energy, slashed the energy efficiency budget, abolished rules on zero carbon housing, lowered taxes on polluting firms and introduced a tax on clean energy and closed the £540m Green Deal, along with energy-saving materials being singled out as no longer qualifying for reduced-rate VAT. The government is giving me little confidence that it is taking the carbon reduction agenda seriously.”
Feed-in-tariff payments on domestic solar panels will also be cut by £192 a year for the typical household, according to calculations.