UK solar power installations plummet after government cuts

The amount of household solar power capacity installed in the past two months has plummeted by three quarters following the government’s cuts to subsidies, according to new figures.

A fall in solar power was expected following a 65% reduction in government incentives paid to householders, but the size of the drop-off will dismay green campaigners who want take up on clean energy sources to accelerate.

Data published by the energy regulator this week shows there was 21 megawatts (MW) of small solar installed in February and March this year, after a new, lower incentive rate came into effect. By contrast, energy department figures show that for the same period in 2015, 81MW was installed.

The cuts were announced just days after energy secretary Amber Rudd helped agree the historic Paris climate deal, and have bankrupted several solar companies. The government says the changes were necessary to protect bill payers, as the solar incentives are levied on household energy bills.

But Lisa Nandy, shadow energy and climate secretary, said: “The chancellor ignored the warnings and slashed support for this important industry in the clear knowledge it would cause job losses and deter investment. These figures show the damage his decision is causing.”

Industry said it was going through a difficult time but there were grounds for optimism.

“The market is going through a very difficult time with deployment down considerably compared to this time last year. This is of course because of the cliff-edge cut to the feed-in tariff [the incentive scheme], and has caused a handful of businesses to close shop over the last few weeks,” said David Pickup, business analyst at the Solar Trade Association.

“However we are confident that solar can still provide an attractive investment in certain circumstances and that the market will recalibrate by selling solar as a package with other smart cutting edge technology to increase self-consumption of the solar electricity.”

The feed-in tariff data for solar schemes under 10kW, considered largely household installs, is slightly skewed because there was a surge in March 2015 as people rushed to meet a deadline for an attractive rate, and because the scheme was closed for the first week of February this year. However, observers said it was clear the bulk of the fall was down to the cuts.

Greenpeace UK energy campaigner Diana Vogtel said: “The UK government is going against both public opinion and economic sense by cutting support for this booming technology. If lowering bills for hard-working families is indeed a priority for the government energy policy, why are ministers backing astronomically expensive new nuclear whilst ditching much cheaper energy sources?”

A spokeswoman for the Department of Energy and Climate Change said: “It’s only fair that the costs on people’s energy bills to support solar projects should come down as the industry establishes itself and costs fall. Ultimately, we want a low carbon energy sector that can stand on its own two feet rather than relying on subsidies.”

This week the IPPR thinktank called on the next mayor of London to make the capital a ‘global green city’ by increasing solar investment. A recycling and waste company said it had installed the capital’s biggest solar photovoltaic scheme in Bow, at 1MW, and a bus shelter made with transparent solar panels was unveiled at Canary Wharf.

The industry also received some sunnier news, in the shape of the European commission’s action plan on VAT, which suggested that Europe will allow ministers’ plans to keep VAT rates at 5%.