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Extreme cuts to solar feed-in tariff will harm consumer interests

Towards the end of August the government proposed slashing feed-in tariff payments for solar PV by up to 87 per cent from January next year.

The proposal is to cut the tariff paid for electricity generated by solar rooftop panels from 12.4p to 1.6p.

The Solar Trade Association has conducted a detailed analysis of the impact assessment that accompanied the proposals, which shows that support would fall to less than £2m a year – a 98 per cent reduction from the current rate of £70m a year.

This is a bigger reduction in the budget than many commentators had initially realised.

Solar is the public’s favourite source of energy, with more than 80 per cent supporting its use.

“Confidence in government energy policy has also been severely undermined”

If these proposals go ahead, households, schools, churches, offices, factories and communities could be denied the chance of acting on climate change and lowering their energy bills.

Confidence in energy policy has also been severely undermined by changes to government support for solar over the summer, with investors now seeing UK plc as an increasingly unsafe place to put their money.

Jobs under threat

Analysis published last week by the STA revealed that across the country 27,000 out of 35,000 jobs in the solar industry and its supply chain are at risk.

Many solar companies are facing the possibility of having to lay off staff, losing experience that is crucial to delivering low-cost solar.

The South-east is set to be the worst hit, with more than 4,000 solar jobs at risk.

The North-west is also heavily affected, with 3,500 of its 4,300 solar jobs threatened by the cuts.

A chorus of support for the British solar industry has been growing in volume since the proposals were announced.

“Many solar companies are facing the possibility of having to lay off staff”

An alliance of organisations ranging from the National Farmers Union and the Confederation of British Industry to social housing providers and local authorities recently urged the government to “urgently reconsider” its proposed cuts.

The Scottish Government, the Welsh Government and mayor of London Boris Johnson have also expressed their concerns, with even former US vice-president Al Gore voicing his disapproval at the news.

Close to subsidy-free

The cost of solar has fallen by 70 per cent over the past five years and is extraordinarily cheap.

The STA estimates that due to falling costs, the extra homes expected to go solar this year under the feed-in tariff scheme would cost households just an extra 50p on annual energy bills.

We hope the government will listen to the widespread calls for it to reconsider, listen to the evidence put forward as part of the consultation and adjust its proposals accordingly.

Solar has the potential to soon be so cheap it could be subsidy-free.

In the long term, it could bring down wholesale electricity costs, as the costs of solar technology falls and those of fossil fuels rise.

The government’s short-term thinking on bills is simply not in the long-term interests of consumers.

Sonia Dunlop is communications and public affairs manager at the Solar Trade Association

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