October 31, 2011 / 10:44 AM / 8 years ago

UK plans to halve solar subsidies

LONDON (Reuters) - Britain plans to halve state subsidies for solar panel schemes of up to 50 kilowatts (kW) and to impose minimum energy efficiency standards on buildings applying for solar feed-in tariffs (FITs), the energy ministry said on Monday.

“The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme,” said Energy Minister Greg Barker in a written statement to Parliament on Monday.

Properties which retrofit solar panels with an installed capacity of up to 4 kW will see rates slashed from 43.3 pence per kilowatt-hour (kWh) to 21.0 pence, while tariffs for installations between 4-10 kW and 10-50 kW will see a 53-55 pct reduction.

Projects starting on or after December 12, will receive current tariffs until April 1, 2012 but new tariffs will apply from then, the government said.

Britain introduced state subsidies for large renewable energy projects in April last year to encourage growth of new green technologies until they reach commercial scale.

The government had already fast tracked a state subsidy review for solar plants earlier this year, cutting rates for the largest schemes by 40-70 percent from August 1, which had caused an outcry among solar plant developers.

Barker said average costs of a domestic solar panel installation had fallen at least 30 percent since the start of the scheme in April 2010 to 9,000 pounds and if the government left current tariffs unchanged, consumers would pay 980 million pounds per year for solar FITs.

“My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust,” he said.

Proposals also include imposing a minimum energy efficiency standard on properties seeking solar subsidies from April 2012.

Buildings could be required to reach a minimum Energy Performance Certificate level of C or participate in the government’s Green Deal programme to install efficiency measures such as loft insulation.

The proposals are subject to a consultation period.

Reporting by Karolin Schaps

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