Senior officials at the Department of Energy and Climate Change (DECC) are sceptical that solar can play a significant role in the UK’s future energy mix and are committed to restricting demand for the technology to a level where it becomes little more than “a toy for rich boys”.
BusinessGreen has learned senior figures within the department recently met solar panel manufacturers in an attempt to explain its heavily criticised handling of the proposed cuts to solar feed-in tariffs and secure support for its plans to limit access to solar incentives to buildings that meet demanding energy-efficiency standards.
According to a summary of the meeting that is circulating around the solar industry and has been obtained by BusinessGreen, the officials echoed arguments put forward by ministers that deep cuts are urgently required to avoid the scheme over spending.
While acknowledging that mistakes had been made in the handling of the proposed cuts, the officials rejected industry calls for a more gradual introduction of reduced feed-in tariff rates on the grounds that the present spending cap for the scheme means there was “not much space for a discussion”.
They also warned that if the proposal to halve the level of support for installations completed after 12 December to 21p/kWh is relaxed there is a real risk that the government will respond to any overspend by reducing the level of support still further to 9p/kWh or axing the scheme altogether.
However, while Energy and Climate Change Secretary Chris Huhne and Climate Minister Greg Barker have repeatedly insisted in public that they want to reform the scheme to create a sustainable solar industry in the UK, the document reveals that DECC officials expressed “clear doubts on whether solar PV makes sense in the UK”.
In addition, they rejected the industry’s claims that the deep cuts to incentives will result in the loss of tens of thousands of high value jobs, arguing the jobs that had been created by the industry were “unsustainable”.
There have been rumours that some ministers and officials within DECC remain unconvinced solar can play a significant role in the UK and it is believed that prior to the proposed cuts being announced the department had considered slashing levels of support by over 75 per cent to just 9p/kWh.
There is also speculation across the solar industry that the large energy companies are lobbying the department to cut support levels to a level that effectively kills off the solar sector.
However, the leaked document provides the first confirmation that senior figures within the department are actively considering moves that would all but kill the industry in the UK and are unconvinced by research that suggests solar technologies can work effectively in northern latitudes and will be cost competitive with fossil fuels within five to 10 years.
The summary of the meeting concludes the combination of proposed cuts to feed-in tariffs that would limit rates of return on new installations to under five per cent and the move to ensure only homes that have undertaken Green Deal energy efficiency improvements are eligible for incentives demonstrates that DECC is committed to “turning solar PV into some kind of toy for rich boys”.
BusinessGreen understands solar firms are now bracing themselves for a lengthy period of uncertainty as the on-going legal action against the government’s consultation could result in it being extended into the New Year.
They are also planning to address DECC’s concerns about the viability of solar in the UK with a series of reports detailing potential solar energy production between 2016 and 2020 and surveys demonstrating widespread public support for solar technologies that in reality would add only small amounts to energy bills.
In addition, they are expected to submit detailed proposals to the consultation mapping out how subsidies for the sector can be removed over time in a planned and consistent manner.
A spokeswoman for DECC told BusinessGreen the department remains fully committed to developing a successful solar industry in the UK, but urgent reforms to the feed-in tariff scheme were required to ensure it remains within budget.
“We are taking action to ensure that the FITs scheme stays within budget and to put the solar industry on a steadier, clearer and sustainable growth path, avoiding boom and bust,” she said.
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