The Department for Energy and Climate Change (DECC) announced in July a package of measures to reduce subsidies to renewable energy that will impact upon businesses operating in the renewable energy sector.
DECC has launched a consultation on plans that would see subsidies for some new solar farms cease by April 2016. In addition, the DECC has announced the removal of the guaranteed level of subsidy for biomass conversations and co-firing projects. A further consultation has also been announced which will see DECC consult on changes to the feed-in tariff scheme regarding changes to the preliminary accreditation rules - providing companies with a guaranteed tariff in advance of commissioning a project. This is to be followed by a wider review of the scheme to achieve further savings.
Subsidies for clean energy are ultimately raised through end user bills. Recent projections indicate that the subsidies for renewable energy are likely to exceed anticipated levels and the overall cap on how far bills can be raised. The Secretary of State for Energy and Climate Change in announcing these measures stated:
“Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment”.