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Mixed reaction to solar subsidy cuts
Published:  20 December, 2015

Industry reaction to the cuts for small-scale solar electricity cuts has been mixed, with BSRIA expressing its disappointment, but the Electrical Contractors' Association (ECA) saying it was relieved the cuts didn't go further.

The government announced on 17 December that the small-scale domestic solar PV subsidies would be reduced by 64%, following consultation with industry.

Julia Evans, chief executive at BSRIA, said: "The cuts have been softened following a storm of criticism. The government says large-scale solar farms are cost-competitive, but the industry is worried about a new government cap on the volume of solar installations.

"It is bizarre that the government continues to hand out billions of pounds in subsidies every year to 'less green' fossil fuels, while trying to block the clean energy sources the UK urgently needs.

"This news is disappointing given that subsidies were one of the cheapest ways that the government could meet its statutory climate change targets."

Domestic solar subsidies were said to be costing households about £7 a year and the industry has said the planned cuts, which were announced in the summer, have already cost 6,500 jobs.

ECA director of business services, Paul Reeve, commented: "The fact that many are relieved at a 64% reduction is an indication of what we've managed to avoid. Solar simply needs five more years to head towards a no subsidy future, and the government's announcement may just allow it to get there.

"However, there is more to the government plans than a headline domestic rate of 4.39p/kWh; there is also a cap on the tariff of £100 million up to 2018. This could effectively ration solar PV deployment going forward, so the industry really does need to move towards a no subsidy, grid parity model as soon as possible.

"For solar PV, the cavalry, when it comes, will be in the form of greatly increased electrical storage capability that will allow solar to make a second breakthrough."

In October, BSRIA supported the Solar Trade Association's emergency rescue plan that, it claimed, would save 27,000 jobs across the sector.