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The Markets
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Energy

UK solar power cuts to hit industry and jobs, say firms

Revised government plans to cut subsidies could cost 18,700 jobs, industry says

Renewable power companies and campaigners have hit out at the UK government's final ruling on solar subsidies.

Good Energy (LON:GOOD) said the Department of Energy & Climate Change's decision to cut feed-in tariffs (FITs) by 64% rather than up to 87%, to 4.39p per kilowatt hour from 12p, were "a slight improvement" on the original proposals.

But chief executive Juliet Davenport said: "They still mean installing solar panels will no longer be attractive to British home-owners.

"The changes will also make it harder for housing associations and councils to use FITs to help those in fuel poverty."

FITs allow householders to be paid for electricity they generate from solar, wind, hydro or anaerobic digestion power, whether they use it themselves or export any surplus to the grid.

The government decided on a set amount to be paid to renewables by 2020 and earlier this year, the Office for Budget Responsibility predicted that amount would be exceeded, meaning bill-payers would have to pay more.

Solar power companies and campaigners reacted in dismay when ministers responded with proposals to cut subsidies to renewable energy sources such as solar.

The government has also confirmed a decision to exclude big commercial solar roofs and solar farms from so-called renewables obligation support.

Campaigners claimed the cuts would lead to thousands of job losses and would undermine development of solar at a time when companies were still trying to establish themselves.

The issue took on extra resonance after the Paris climate change conference, when campaigners accused ministers of double standards by backing a deal reached there while cutting subsidies.

Ministers on Thursday insisted that the revised proposals showed they had listened to the criticism and to consultation feedback.

A spokesman said: "The new FIT rates provide a sustainable return for anyone investing in small-scale renewable technology that contributes to our energy mix without imposing unnecessary burdens on bill-payers who subsidise the renewable industry."

The Solar Trade Association (STA) said the government had partially listened and the latest proposals were better than the original plans.

But it said the government's own impact assessment had shown that the revised plans could still lead to up to 18,700 job losses.

STA chief executive Paul Barwell said: "We will continue to push for a better deal for what will inevitably be a more consolidated industry with fewer companies.

"However, in a world that has just committed to strengthened climate action in Paris and which sees solar as the future, the UK Government needs to get behind the British solar industry.

"Allocating only around 1% of its clean-power budget to new solar is too little, particularly when solar is now so cost-effective."

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