Green subsidy to be cut by 64%, rather than the 87% reduction originally proposed

Solar panels

The government has reined in its planned cuts to feed-in-tariffs (FITs), which it will now cut by 64% rather than its original proposal of 87%.

The FITs scheme allows households to claim money from energy suppliers if they generate their own electricity through renewable sources, most popularly used through solar panels, but also through wind turbines.

The government previously argued the deeper cut to FITs was neccessary due to a massive projected overspend on the subsidy, in part due to the plummeting cost of solar technology. Solar firms on the other hand argued the cut went too far and would have a devastating effect on the industry and cost thousands of jobs.

The FIT will be cut to 4.39p/kWh from 12p/kWh today. The government had originally proposed a cut down to 1.53p/kWh.

The new tariffs will come into force from 8 February, and the deadline for projects to receive the current higher tariffs is now 15 January.

The reduced cut was in part welcomed by the solar industry, but the sector warned the cut would still have a negative impact. Paul Barwell, chief executive of the Solar Trade Association, said: “Government has partially listened. It’s not what we needed, but it’s better than the original proposals, and we will continue to push for a better deal for what will inevitably be a more consolidated industry with fewer companies.

“However, in a world that has just committed to strengthened climate action in Paris and which sees solar as the future, the UK Government needs to get behind the British solar industry. Allocating only around 1% of its clean power budget to new solar is too little, particularly when solar is now so cost-effective. Poor ambition for solar risks missing out on not only our renewable energy targets in the UK, but on the world’s greatest economic opportunity too.

“The industry will certainly try its hardest but we will be pressing Government to do much more to boost solar power.”