Britain follows Paris deal with cuts to green subsidies

LONDON (Reuters) - Britain cut more renewable energy subsidies on Thursday, putting jobs at risk and drawing criticism for losing credibility in tackling climate change, a week after the landmark deal in Paris.

Construction work is seen being undertaken at a field of solar panels near Andover in southern England May 3, 2013. REUTERS/Toby Melville

Britain’s Conservative government has been reining in spending on all renewables subsidies since it took power in May, saying the cost of technology has come down sharply and subsidies should reflect that.

Thursday’s cuts came a day after it allowed the use of fracking to extract shale gas below national parks and protected areas and as the licenses were awarded for shale oil and gas extraction.

“Ministers happily take credit for being climate champions on an international stage while flagrantly undermining the renewable industry here at home,” said Green MP Caroline Lucas.

Britain has made good progress in making electricity greener, with low-carbon energy accounting for a record 39 percent of electricity generation last year, Amber Rudd, Secretary of State for Energy and Climate Change, said in a written statement to Parliament on Thursday.

The government produced its own impact assessment on the changes showing they could result in the loss of between 9,700 and 18,700 solar jobs.

“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,” Paul Barwell, the head of Britain’s Solar Trade Association, said in a statement.

A parliamentary committee this week warned that Britain could face the same kind of downturn in the solar industry which has affected Spain and Italy - which also made significant cuts to renewables subsides.


Britain has cut the tariff for domestic-scale solar up to 10 kilowatts in capacity, such as rooftop solar photovoltaic (PV) installations, to 4.39 pence per kilowatt hour.

Under the old tariffs, solar power up to 4 kilowatts in capacity was paid at 12.47 pence per kilowatt hour and for 4-50 kilowatts it was 11.30 pence.

It had proposed much steeper cut to 1.63 p/KWh in consultation in August, but the solar industry lobbied hard for a more gradual decline.

The government also capped spending on the Feed-in-Tariff (FiT) scheme at a maximum 100 million pounds a year for new installations from February next year to April 2019.

Under that scheme, households, businesses or farms which install low-carbon energy sources such as solar panels or small wind turbines are paid for the electricity they generate and unused energy can be sold to electricity suppliers.

Renewable energy companies said the cuts were less drastic than originally proposed but could would still lead to much less deployment of solar energy.

“The new measures ... still mean that installing solar panels will no longer be attractive to British home-owners,” said Juliet Davenport, chief executive of Good Energy, one of the largest feed-in-tariff administrators in Britain.

In Thursday’s announcement, the government also confirmed it would close another of its subsidy schemes, the Renewable Obligation, two years earlier than planned to new solar PV capacity of 5 megawatts and below from next April.

It said it would introduce a grace period for those developers who made financial commitments on or before July 22 this year and those who experience delays beyond their control in connecting to the electricity grid.

Thursday’s changes would reduce an overspend by 500 to 600 million pounds, the government said.

Link to FiT review: here

additional reporting by James Davey and William James and Karolin Schaps; editing by David Clarke and William Hardy