UK energy secretary defends solar FIT cuts

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Amber Rudd, the U.K. Energy and Climate Change Secretary, writing for BusinessGreen, has sought to defend her department’s proposals to slash the feed-in tariff (FIT) by as much 87% from January 1, 2016.

The announcement by the Department of Energy and Climate Change (DECC) in August that it was proposing to drastically cut the FIT caused shockwaves throughout the U.K. solar sector. The industry was readying itself for a cut – perhaps as high as 50% – but had not countenanced the possibility that support could be slashed by 87%.

In seeking to defend this move in, and having faced severe and sustained criticism from a number of renewable energy advocates, organizations and campaigners, Rudd explained in her column that the government’s priority remains transitioning to a cleaner energy landscape in "the most cost-effective way possible", and talked of how this proposed round of FIT cuts will allow the government to "get to grips" with a sensible and affordable approach to energy support.

Rudd admitted that the government had "overspent" on subsidies, pointing to the runaway success of solar under the FIT. "Take-up has been so great that we expect to achieve our ambition [of supporting 750,000 installations by 2020] by the end of this year. But this has meant that the overall cost of the scheme has also exceeded expectations."

The energy secretary added that solar’s "spectacular" price reductions have prompted the government to make further cuts to subsidy rates so as not to exceed the £7.6bn ($11.6 billion) limit on the Levy Control Framework set for 2020.

"We have made better progress in deploying renewable energy than we could possibly have imagined," wrote Rudd. "But we have to balance that success with limiting the impact on people’s bills."

Industry united in criticism of cuts

Many leading voices active in the U.K. solar industry have voiced their concerns over the proposed cuts, with Panasonic making the unusual decision over the weekend to comment on political matters in what has become one of its key markets.

Daniel Roca, U.K. country manager for the Japanese company’s solar division, has called on the government to rethink its proposals in order to “keep the industry alive".

"Let’s help solar further develop to become fully independent from state support, with energy storage and a closer involvement of utilities," said Roca. "But let’s not push the bird out of the next before it can properly fly."

Panasonic will soon launch its home battery system into the U.K. market, and Roca is adamant that these proposals will cause irreversible damage to the sector. "We urge the U.K. government to immediately open dialogue with the solar industry during this consultation period to evaluate and significantly reduce and balance these proposed cuts and the substantial damage they will cause."