What the solar cuts mean for community energy
This morning the government announced plans to remove a bunch of renewable subsidies. The cries of renewable energy co-operatives, businesses and campaigners could be heard up and down the country.
Cutting subsidies for solar farms
The big focus was on cutting solar subsidies for smaller solar farms. If the solar farm you want to build is 5MW or less, you won’t be able to access something called the Renewables Obligation (RO) subsidy scheme.
The government argues this is necessary due to an overspend of the government’s clean energy support budget. Overspend on this budget could, it’s argued, lead to higher energy bills. Campaigners and the solar industry dispute this, pointing to the high cost of nuclear and roads projects, as well as possible savings to be made via energy efficiency projects. They also argue that now is not the time to remove subsidies for solar. We’re speedily getting to a point where solar won’t need subsidies, but we’re not quite there yet. Cutting it now could do a lot of damage to Britain’s record-breaking solar growth.
Cuts to solar subsidies are a particular hit to the community energy sector as so much of it is in solar. The government cut a similar subsidy for larger solar farms a few years back, but this only really affected commercial projects, as communities tend not to be able to raise enough money to work on such a massive scale. It’s the 5MW and lower size of solar farm which community energy projects tend to work at.
Moreover, a combination of lack of support for hydro and a rather hostile planning environment for wind has meant that, in recent years, community energy groups have crowded towards solar as a safer bet. So a hit on solar is effectively a hit on community energy.
Lack of certainty for FITs
On top of these announcements were also plans to stop middle-sized rooftop solar and wind projects getting something called “pre-accreditation” were also announced.
To decode the jargon, currently, once a project has planning permission and a grid connection secured, the level of feed-in tariff (FIT) subsidy is set. If it gets cut after that, the project won’t be affected.
The idea is to bring certainty for developers and investors putting money into a project at the beginning. This is especially important for community groups who don’t have the sort of financial backing which lets them take risks. Commercial projects come backed with a nice flow of capital to keep things moving without pre-accreditation, community groups just aren’t.
Game over for community-owned renewables? No.
The government isn’t killing community renewables, but they are hitting the pause button.
The uncertainty these new announcements are generating are likely to stop people bringing forward new projects. Having no confirmed subsidies will make it harder to attract investors.
In terms of the project we’re supporting at Balcombe, it looks like they are far enough along the solar planning process that they can qualify for the current subsidies. But their story has inspired several other communities, and for them, the future looks much less bright.
DECC knows it is possibly damaging the growth of community energy with these reforms. It’s explicitly mentioned in the consultation document. It’spage nine if you’re looking, which states “we are aware that these changes will have a particular impact upon the community sector” and follows up by saying that as part of a further FIT review later this year, they might consider reintroducing pre-accreditation for community groups.
What about Solar Schools, or the church that wants to do something similar?
For schools, religious buildings, social housing or community centres getting solar panels the picture is relatively mixed.
It partly depends on the size of the roof. Larger roofs, 50kW or more, will suffer from the pre-accreditation issue too. But for most schools, particularly primary schools and smaller secondary schools, the changes shouldn’t affect getting solar (for now at least — we don’t know what that FIT review in the Autumn will say).
The government isn't killing community renewables, but they are hitting the pause button.
For us specifically, our Solar Schools are mostly fine — almost all of them will install solar panels below the 50 kW threshold. But for those with bigger roofs, all this leads of a fog of uncertainty, and will certainly deter people from taking on projects on this scale. And everyone has reason to be concerned.
What can I do?
These proposals are consultation documents. So you can let DECC know what you think. There are some tight deadlines though, so don’t put it off.
We know Amber Rudd is sympathetic to community energy and we know that the UK public are keen too, especially when it comes to solar. Which just need the government to be reminded that this is a change in policy the UK public don’t want. We’re on our way to building a more democratic and more climate friendly energy system. We don’t want to see that sabotaged.