The government has announced its decision on support levels for the Renewables Obligation (RO) and Feed-in Tariff (FiT) schemes, following its recent consultation.
While it confirmed that support for the rooftop and ground-mounted solar PV projects would cease from 1 April next year, as stated earlier this year, cuts within the FiT scheme were not as dramatic as had been feared.
FiT rates for domestic solar PV will be reduced from the current 12p/kWh to 4.39p/kWh, instead of the rate of 163p/kWh initially proposed by the government prior to the consultation.
Although cuts will amount to 64% of the current rate in some areas, this is an improvement on the 87% level previously proposed.
The original announcement by the government had prompted widespread protests and warnings of many thousands of job losses, with company closures and numerous redundancies already announced.
Industry bodies including the Electrical Contractors’ Association (ECA) and the Solar Trade Association (STA) have reacted to the government announcements.
ECA director of business services Paul Reeve said the new rates “may just allow” solar PV to achieve a “no subsidy future” in five years.
”However, there is more to the government plans than a headline domestic rate of 4.39p /kWh, there is also a cap on the tariff of £100 million up to 2018. This could effectively ration solar PV deployment going forward, so the industry really does need to move towards a no subsidy, grid parity model as soon as possible,” he said.
“For solar PV, the cavalry, when it comes, will be in the form of greatly increased electrical storage capability that will allow solar to make a second breakthrough,” Mr Reeve concluded.
Highlighting the government expects between 9,700 and 18,700 jobs to be lost as a result of the announcements, STA chief executive Paul Barwell said “It’s not what we needed, but it’s better than the original proposals”.
Referring to last week’s Paris Agreement on climate change, he said the UK government needs to “get behind the British solar industry”.