The Department for Energy and Climate Change is to proceed with significant cuts to subsidies available for solar projects and could announce the cuts “within weeks”, according to BBC World at One.
The radio programme cited an anonymous Cabinet source as stating that a “big reset on subsidies” was being prepared after the government admitted that it needed to rein in costs, and that there was a “hardening view within the Cabinet” towards renewable technologies.
It follows several national newspapers reporting leaks from within the cabinet over the course of the past week hinting towards a drastic rethink in solar subsidies, with DECC said to have recorded a significant overspend on the Levy Control Framework budget.
Speaking to Solar Power Portal earlier this week energy and climate change secretary Amber Rudd said the government was “looking carefully” at solar subsidies in the wake of the overspend but offered no clarity as to what cuts could materialise, and DECC has yet to issue any guidance publicly on what could be cut.
A Policy Exchange report issued yesterday alluded to the LCF spend, which is supposed to be capped at £7.6 billion by 2020, reaching as high as £9 billion by that year and argued that the solar industry could survive sweeping cuts to the small-scale feed-in tariff, which the think tank argued was an “enormously generous” scheme.
Also proposed within the report was the imposition of a subsidy cap of £70/MWh on all subsidy schemes for large-scale renewable energy projects and a revamp of the Green Deal financing programme, which Policy Exchange said had “failed to deliver” on consumer expectations.
Reacting to a further leaked report in the Daily Mail which suggested solar is facing a "big reset" in subsidies, James Court, head of external affairs at the Renewable Energy Association told Solar Power Portal: “Solar is the closest technology to grid parity – we need to ensure that the transition to post-subsidy does not threaten industry but still delivers cost-effectiveness.”
The Department for Energy and Climate Change had yet to respond to requests for comment by Solar Power Portal at the time of publication.
This is a developing story and will be updated as and when additional information is available.