UK solar firms request review over early end to subsidies

Mon Aug 4, 2014 4:51am EDT

Related Topics

* Gov't wants to end subsidy scheme early

* Solar firms say this unlawful; want decision reversed

By Nina Chestney

LONDON, Aug 4 (Reuters) - Four of Britain's largest solar companies have requested a judicial review of a government proposal to halt a subsidy scheme for solar energy earlier than planned.

Solarcentury, TGC Renewables, Lark Energy and Orta Solar Farms are challenging a decision by the government to end its Renewable Obligation (RO) scheme for solar farms with a capacity greater than 5 megawatts from April 2015, two years earlier than planned.

The RO scheme, introduced in 2002, gives incentives for electricity suppliers in Britain to provide a rising share of power from renewable sources.

In May, the government's Department of Energy and Climate Change (DECC) proposed an earlier end to RO subsidies for solar to prevent costs from soaring and to ensure there was sufficient cash for other low-carbon technologies.

However, solar companies want the decision reversed, arguing that the move was unlawful, could result in large numbers of job cuts and cost the solar industry hundreds of millions of pounds.

"Solar is tantalisingly close to becoming subsidy-free, meaning cheaper bills for consumers and we want to achieve this goal as quickly as possible," Ben Cosh, managing director of TGC Renewables, said in a statement on Monday.

"All we need from Ed Davey is stable and lawful policy, but instead he has yet again pulled the rug from under the industry's feet," he added. Davey is Britain's Secretary of State for Energy and Climate Change.

Solar projects will still be able to apply for Britain's new contracts-for-difference scheme, which gives renewable power generators certainty of a minimum electricity price over 15 years. The CFD scheme starts in April next year.

Britain's large-scale solar projects currently earn subsidies of around 170 million pounds ($286 million) a year, according to analysts at Bernstein Research.

Britain is the largest solar photovoltaic market in Europe, with almost 5 gigawatts (GW) of total installed capacity.

However, the government decision "will essentially kill the growing market for large-scale solar installations in the UK," the Bernstein analysts said in a research note.

"For the rest of 2014 and Q1 2015, we will see a mad rush for existing consented projects to complete," they added.

The solar industry has clashed with the government before over changes to subsidies.

Last month, the High Court ruled that the government did not give solar installers sufficient notice of cuts to another support scheme, feed-in tariffs. (1 US dollar = 0.5944 British pound) (Editing by Keiron Henderson)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.