Solar PV Announcements

Solar PV Announcements

Last week, the Government morning released its long awaited response to the consultation on changes it carried out to financial support for solar PV.

The consultation response set out the following key announcements which, subject to Parliamentary approval, will come into force on 1 April 2016:

• The Government has decided to close the RO across Great Britain to new solar PV generating stations at 5MW and below in scale from 1 April 2016, and to additional capacity added to existing accredited stations that does not take it above 5MW in total installed capacity from that date.
• The Government has decided to provide closure grace periods in line with those provided for solar PV projects above 5MW.
• The Government has decided to keep the eligibility date of 22 July 2015 and evidence that has to be provided in order to benefit from the grace periods.
• The Government has decided to remove grandfathering for projects in England and Wales at 5MW and below with an accreditation date from 23 July 2015 onwards.
• The Government has decided to provide an exception to the removal of grandfathering to those projects that can demonstrate that they had made a significant financial commitment on or before 22 July 2015.
• The Government has decided that there is sufficient evidence to hold a technology-specific banding review for solar PV in England and Wales.

 These announcements show a continued direction of travel towards removing Government subsidy and support, particularly in the energy sector. Although not too surprising, these announcements also outline in their own impact assessment the suggestion of over 18,000 jobs being lost. The changes will result in subsidies being cut by 64%, which although less than the previous proposal of an 87% reduction, will still come as unwelcome news from a sector previously reliant on Government support in this area.

The Energy and Climate Change Secretary, Amber Rudd, said, “We have to get the balance right and I am clear that subsidies should be temporary, not part of a permanent business mode”. Her Labour counterpart, the Shadow Energy and Climate Secretary, Lisa Nandy, has replied by saying, “These short-sighted cuts will place big limits on our solar industry and lead to job losses. These cuts stand in stark contrast to the generous handouts Ministers recently announced to dirty diesel generators. At a time when energy bills are a big concern it makes no sense to limit one of the cheapest forms of clean energy.” These proposals and consultation has also been stirring parliamentary interest with a number of Parliamentary Questions being tabled requesting further information and calls for a full Parliamentary debate.

Following the global climate change conference in Paris, these announcements show an unsettling yet unsurprising continuation down a path which has seen Government policy try to push out responsibility to the private sector.What this will mean for the sector and for wider energy policy remains to be seen. However, if this is anything to go by, those in the sector and others reliant on Government subsidy may want to brace themselves for further announcements from a Government which one described itself as “the greenest Government ever.”