Solar subsidies slashed and CfD allocations announced
On 13 May, the Department of Energy & Climate Change (DECC) published four documents giving more detail of how the financial support that the government gives to renewable energy schemes will work going forward.
The most controversial proposal relates to cutting the subsidies for standalone solar PV (also known as ‘solar farms’). Larger-scale renewable energy generation is supported by the Renewables Obligation (RO) and smaller schemes receive the Feed-in Tariff (FIT). The cost of these is paid through consumers’ energy bills. The Levy Control Framework sets annual limits on the cost of these schemes, so that consumers’ energy bills do not increase too much.
Large-scale solar PV is deploying much faster than the government expected, so is putting pressure on the Levy Control Framework. The government is therefore proposing action to control the cost of large-scale solar PV by closing the RO across the UK to new solar PV capacity above 5MW from 1 April 2015 (with a one-year grace period for stations that have received preliminary accreditation on or before 13 May 2014 or can demonstrate to Ofgem that they have made ‘significant financial commitments’ in respect of the project on or before 13 May 2014)…
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