The news that the Government has announced another round of cuts to renewable sources, this time aimed at solar subsidies, has been met with shock and dismay from green campaigners. After the Renewable Obligation Subsidy cuts were announced last month, aimed at onshore wind generation, this latest revelation has heightened fears that the UK will fall behind in the race to reach its own ambitious carbon emission reduction targets.
These cuts will reduce the subsidies granted to those who wish to install solar roof panels through a review of the feed-in tariff scheme, accompanied by the launch of a consultation on controlling subsidies for solar PV of 5mw and below.
The cuts are part of a plan by the DECC to bring costs under control and stop overspending. Amber Rudd, Secretary of State for Energy and Climate Change, supports the plans, defending them against criticism that investment will be ‘chased away’.
“Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment,” she commented this week.
Despite Rudd’s confidence, accusations of hypocrisy are rife among Green Campaigners with many questioning how a government can be so supportive of a Climate Change plan in Europe and yet dismiss domestic green policy so readily.
It is very clear to most that the books need to be balanced, and cuts are occurring in every sector to try and bring the deficit down. However, the main fear is that, through the cuts, we will be returning to a dark age of fossil fuel reliance. While renewables do receive a lot of money through government support, it is often forgotten that fossil fuels still receive an estimated £3.4 trillion worth of direct and indirect subsidy support.
So is the Panic Justified?
There’s no doubt that climate change is a pressing issue, and failure to reverse its effects will have catastrophic consequences. However, are the cuts going to be as disastrous as Green campaigners assume?
In 2011, Feed-in Tariff support for solar panel installation was cut in half, as a result of the huge underestimation of uptake on the part of the government. Instead of killing solar dead (as the press at the time threatened) the installation of solar panels has continued to flourish, so will further cuts make much of a difference?
In a recent poll by YouGov, over a fifth of people wanted to see more solar power being used, showing that there is a public desire for renewable energy use. However, perhaps more interestingly, over a quarter of recipients (26%) wanted to see further use of wave and tidal energy, sources that have not yet received a subsidy cut.
The RHI Quarterly report released today (23rd July) has stated that 94% of non-Domestic Applications to the scheme are for the use of small or medium biomass boilers. In the Domestic sphere, only a quarter of applications were in regards to using biomass boilers but this still exceeded the number of applications for Solar Thermal. which only accounted for 18%.
The monthly report on the Domestic Green Deal and Energy Company Obligation has also shown no let-up in green measures being promoted. Since its launch, 1.54 million measures have been installed in 1.25 million properties across Britain, with the number of plans for installation increasing by 7% between May 2015 and June2015. Of new installations, 51% were in regards to biomass with only 12% being for solar thermal measures.
Green subsides are controlled by a Levy Control Framework which caps the amount the government can spend, from bills, on green initiatives. However, as demand rises this leads to the cap exceeding its £4.3 billion limit (even with a 20% grace margin). The overspending is largely due to the large uptake of Solar Roof Panels, showing that demand is there and it is unlikely that this demand will fall too much even if the subsidy is less generous.
The outlook therefore does not seem as destructive as first thought. Instead it seems that we should be rejoicing that the reason cuts are needed is possibly because the subsidies have been too successful.
Love Energy Savings is versatile energy comparison service which has saved its customers over £65million on their energy bills since its launch. Providing thought leadership on energy prices and energy use means you can rely the Love Energy Savings site to give you all the information you need regarding developments the energy sector.
RHI Quarterly Review
Domestic Green Deal and Energy Company Obligation