In addition to closing support for small-scale solar schemes, the government also wants to change the way renewable projects qualify for subsidies.
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The Renewables Obligation, which now supports rooftop and solar farm projects between 1MW and 5MW in size, is according to these plans set out today to be closed from 1 April 2016, as well as a planned reduction in levels of support for projects now in the pipeline.
Ms Rudd, who gave evidence to the energy committee on Tuesday about her department’s priorities, said the government was willing to pay more for nuclear power because, unlike wind and solar, it was not intermittent.
Households planning to install solar panels on their roofs are likely to see subsidy payments on offer cut significantly, as ministers attempt to prevent a forecast £1.5 billion overspend on renewable energy.
It also highlights the importance of maintaining support so that the majority of the industry, which includes many small and medium enterprises, will be able to reach grid-parity.
“We can’t have a system, which we’ve had up to now, where there is basically unlimited [subsidy] headroom for new renewables, including solar”.
“Again, it reinforces our call to [the] UK government to devolve all energy powers to Wales to ensure that we maximise the economic potential of renewable energy power generation and benefit communities across Wales”.
The Friends of the Earth energy campaigner Alasdair Cameron added that it represented the “latest attack on the green economy” that would undermine efforts to tackle climate change.
“A much longer-term commitment to renewable energy will ensure that projects can continue to attract necessary finance up to and beyond 2020, and that exciting new technologies like large-scale solar, geothermal and ocean energy have the opportunity to contribute to Australia’s energy mix as they become increasing competitive over the next decade”.
Keith Taylor, Green MEP for South East England, added: “Amber Rudd’s incoherence in blindly supporting nuclear subsidies whilst cutting renewable funding is breathtaking”.
The problem for the government is that it can not tell whether the green industries are crying wolf over subsidies without pushing them over the cliff of self-sufficiency and seeing whether they fly or die.
The move is estimated to save the country about £500m per year in 2020/21.
The government has already announced it would stop wind farm subsidies in 2016.
Industry body the Solar Trade Association (STA) said the move would hit large rooftop schemes, which the Government has been keen to back, as well as solar farms.
“The possible removal going forwards of the guarantee on a set level of support throughout a project’s lifetime once built is a real blow to investor confidence”.
“At a time when we really need solar to play a major role in our energy mix and energy security, government should be getting right behind it, not undermining and stifling its growth”, she said. “Solar is the nation’s most popular form of energy, as the government’s own opinion polls have shown”.
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He said government support had been “absolutely instrumental in the industry’s success” over the past five years, and that the industry was “tantalisingly close” to being able to operate without any subsidy.
