Cut in renewable energy subsidies continues Conservative ‘green shrink’

The Department of Energy and Climate Change (DECC) plans to reduce support for some renewable energy projects, through changes to both the Renewables Obligation for larger projects and the Feed in Tariff for smaller ones.

The Renewables Obligation, which supports rooftop and solar farm projects between 50KW and 5MW in size, looks set to be closed from next April under government plans. DECC is also proposing to end ‘grandfathering’ within the scheme from now on, no longer providing developers with the guarantee that a certain level of subsidy will be provided through the lifetime of a solar project.

DECC plans to remove the ‘pre-accreditation’ mechanism from the Feed in Tariff, which supports small scale solar photovoltaic, wind, hydro and anaerobic digestion projects. The mechanism gives generators the security of a guaranteed tariff level before commissioning their installation. The change would not affect the average household installation but would mean that more complex community and commercial projects, which can take longer to complete, could have to deal with reducing tariff levels between the start and finish of the project. DECC is planning a full review of the feed in tariff scheme later this year.

The proposals are the latest in a string of announcements from the government, signalling a shift in Conservative policy focus from green growth to green shrink. In 2010, the Conservative Party devoted a day of its annual conference to green growth and coalition prime minister David Cameron said he wanted the new coalition administration to be “the greenest government ever”.

Since coming to power in May, the Conservative government has rolled back a number of green policies, including:

  • Dropping the target for all new homes built from 2016 to meet zero carbon standards, and with it the use of the Allowable Solutions approach to meet that target
  • Dropping the accompanying target for non-domestic buildings built from 2019 to meet zero carbon standards
  • Announcing plans to end onshore wind subsidies.

However, one area of green policymaking that new energy secretary Amber Rudd has expressed enthusiasm for is domestic energy efficiency retrofit. Speaking of DECC’s priorities for 2015, Rudd told parliament’s energy and climate change committee: “I’m particularly ambitious in this area and I want to put together a long-term framework for homes and fuel poverty.” Rudd added that recent initiatives are being analysed to see what has worked, and what hasn’t. DECC is set to announce the details of the successor to the Energy Company Obligation – the Supplier Commitment – in the autumn.

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