UK: Solar spending cuts amount to 98% reduction in support, STA calculates

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Plans by the U.K. government to reduce support for solar will amount to a 98% cut in the total PV budget, the Solar Trade Association (STA) has calculated in its most recent analysis of the proposals.

The Department of Energy and Climate Change (DECC) proposed a consultation of the feed-in tariff (FIT) review in August that will lead to a reported 87% slash in subsidy for many solar installations.

This headline figure actually masks the true extent of the government’s proposed cuts to solar, the STA finds, with a detailed analysis showing that a mere £7million ($10.6 million) will be spent on new solar deployment under the FIT over the next three years.

The current run rate is just below £70 million ($106 million), meaning a 98% reduction to just £2 million is on the cards for next year. By way of comparison, the STA stated that the council of the county of Buckinghamshire allocates £7 million per year for potholes.

Put another way, solar will receive just 0.04% of the U.K.’s Levy Control Framework (LCF) budget – a pot of money skimmed from customers’ energy bills and spent towards efficiency and infrastructure upgrades – which stands at £7.6 billion between now and 2020.

"Allocating £7 million of support for solar power – the world’s fastest growing clean energy solution – is absurd," said STA CEO Paul Barwell. "This does not constitute a serious energy policy. Solar can transform choice and competition in electricity markets, so the government’s short-term thinking on bills risks condemning hardworking families to a future of higher energy costs."

Barwell added that the 98% cut in support will decimate an industry that has risen to become the nation’s most popular source of energy, and will put at risk 20,000 jobs.

"We have a plan to maintain a robust and growing solar industry and are keen to work with government to find an effective solar policy that also delivers value for money," Barwell stressed. "It is essential the government rethinks its proposals – jobs and businesses are at risk."

Leading voices have rounded on the government in the weeks following the proposals, with the impact the cuts will have on British industry proving a persuasive and unifying factor among many observers. The head of the Confederation of British Industry (CBI) – largely considered a rather conservative-leaning outfit – has labeled the government’s stance "worrying", while both DuPont and Energy U.K., the body that represents energy utilities, have asked the government to urgently reconsider its proposals.