Thursday, March 1, 2012

Solar Subsidy Cuts Spark Job Fears

The Government has unveiled plans for further cuts to solar subsidies, sparking concerns over the future of the industry and thousands of clean-tech jobs.

Energy Minister Greg Barker claimed the reforms to payments for small-scale solar would mean a bigger scheme that could deliver an "extraordinarily ambitious" 22GW of panels - the equivalent of 3.3 million installations for homes and businesses.

He insisted the changes would mean that the payments tracked the falling costs of solar technology, delivering value for money for consumers who pay for the scheme on energy bills and preventing another "bubble" in the industry.

But campaigners said the proposals to cut subsidies further, announced as the Government said it was pressing ahead with plans to halve the payments, would leave the solar industry "dead in a ditch", putting thousands of jobs at risk.

Ministers have previously warned the falling costs of technology made the payments too generous, causing too rapid a take-up of solar panels. As a result, the feed-in tariffs scheme, which pays householders, organisations and businesses for electricity from small-scale renewables, has spiralled over budget.

The Department of Energy and Climate Change (Decc) revealed the popularity of solar panels meant the £1 billion budget for the current spending period had been blown, and £1.7 billion was already committed to payments.

Mr Barker said the solar industry should "get real" over subsidies, adding: "I fully expect the industry to expand this year, and continue to expand, but on a sustainable basis not in short bursts of temporary workers."

Under the proposals, the already-planned halving of solar payments for new installations from March - or from last December if the Government wins a Supreme Court challenge over the issue - will be followed by further cuts in July.

Decc said the overspend on the budget will be met by money from underspending on large-scale renewable subsidies, for example for offshore wind. Under the new plans the rate will also apply only to schemes with 25 or more sets of solar panels.

Howard Johns, spokesman for the Cut Don't Kill coalition of solar businesses and environmental campaigners, said: "The Government's initial cut to the tariff was brutal, and this further cut will be utterly devastating for the UK solar sector."


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