Energy efficiency takes a battering in new Government plans

In a move to reduce spending on renewables, Government has announced proposals to cut subsidies by 87% for households and small businesses looking to install solar panels. The news comes just weeks since funding to the Green Deal Finance Company and Green Deal Home Improvement Fund was scrapped. 

Secretary of State for Energy and Climate Change, Amber Rudd, claims these cuts are due to overspending on the budget for renewable projects. Government is proposing a reduction to the feed-in-tariff (FIT) for smaller solar installations, dropping from 12.92p per kilowatt hour to 1.63p per kilowatt hour, with a cap being placed on new expenditure under FITs. This means homeowners and small businesses will receive lower subsidies from the government for the electricity generated by their properties.

Should the proposals be accepted, a budget for all new expenditure will be limited to £75-100 million from 1st January 2016. In addition, ministers are considering removing the generation tariff (the main payment of the feed-in-tariff) for new FIT applications from January 2016 in the event that deployment caps are deemed unlikely to sustain the scheme without harming the budget.

These proposals come at a time when Britain's green future faces much uncertainty. Andy Flook, head of business development at NES, comments:

"With the proposed changes making for a far less attractive initiative, there will be little incentive for home owners and small businesses to consider green energy installations. This is a major step back for energy efficiency." 

Many practitioners and members of the public are concerned that these new proposals could bring an end to the industry and have taken to Twitter to share their thoughts: 

Leonie Greene, head of external affairs at the Solar Trade Association, has said:

"We recognise that Government wants to shift the emphasis to larger solar rooftops, but we have explained to the department (DECC) that these are just 5% of the UK market. More work is needed urgently to unlock larger solar roofs. There is a danger if Government pulls the rug on solar farms too early, the market will have nowhere to go."1

DECC are asking for your views on the new proposals. To share your thoughts, click here to complete their survey. 

Consultation will run until 23rd October. 

1http://www.carbonbrief.org/blog/2015/07/decc-amber-rudd-reduces-subsidies-for-renewable-energy/  

Published 10th September 2015