Government consultation could spell the end of the solar industry in the UK

Commenting on the launch of the government’s consultation on a review of the Feed-in Tariffs (FiT) scheme for renewable energy, Mark Stewart, Baker Tilly’s Head of Infrastructure and Renewable Energy in Scotland said:

‘The Consultation on a review of the FiT scheme could spell the end of the solar industry in the UK, add to the difficulties in delivering an already fractious Hydro market and reduce support for onshore wind to effectively single small turbines.

Projects will become uncommercial for developers with tariffs at these proposed levels and for homeowners there will be no incentive to switch to green energy. There could now be a mad dash to complete renewable deals before the likely closure of the FiT scheme to new applicants post January 2016.

The raft of changes proposed by the government over the last few months - not just the latest FiT consultation - will, if enacted, effectively unwind a decade of progress and end the renewable energy revolution in the UK just as it hits record levels of deployment.

Taken together, these proposals could lead to the demise of an industry which will in turn cost thousands of people their jobs.

This FiT consultation follows the restrictions already placed on onshore wind subsidies earlier this year with the early closure of the Renewables Obligation scheme from March 2016 and the announcement that onshore wind will not feature in future allocation rounds for Contracts for Difference (CfDs) post 2020. A final announcement on the future of CfD is due at the end of autumn which the industry awaits with bated breath. 

A potential silver lining could be the re-classification of the Scottish Islands as 'offshore' for future CfD allocation rounds (with a higher tariff to compensate the cost of the interconnector) which would at least allow some significant developments to go ahead in the windiest parts of Scotland. 

In the global fight for finance, the UK will lose out in the short to medium term as investors seek to deploy their funds in jurisdictions which are certain, stable and supportive of a long-term commitment to carbon reduction. The only certainty in the UK at the moment is the uncertainty and there are no signs of this changing.’