Renewable Obligation support for solar farms under 5MW will be scrapped after 1 April 2016, under Department of Energy and Climate Change plans outlined today.
The government has released a consultation which seeks to remove all renewable obligation support for solar from 1 April 2016 as a reaction to an “over-allocation of renewable subsidies” which has put the Levy Control Framework budget on course for a £1.5 billion overspend.
DECC is also consulting over plans to remove grandfathering of RO rates for any project that is accredited on or after 22 July, 2015. Grandfathered rates for solar PV had previously guaranteed the same level of ROCs for the lifetime of a project and have been instrumental in instilling investor confidence in the sector. However, DECC claims that the move is necessary in order to “avoid potential overcompensation” in the inevitable developer rush to connect solar projects before the scheme is closed.
Announcing the decision, Energy and Climate Change Secretary Amber Rudd praised previous subsidy support for driving down the cost of renewables “significantly”. She added: “As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment”.
The announcement puts to bed some of the intensifying speculation surrounding solar subsidies which had been fanned by anonymous cabinet briefings which warned of a “big reset” to green subsidies. However, the ongoing review of the feed-in tariff represents another area where the government could look to control spending under the Levy Control Framework. DECC has confirmed that the feed-in tariff is facing “further cost-control measures” but has not provided a timeline on any upcoming announcements, only that it will provide more detail “later in the summer”.
Solar Power Portal will update this story as it develops