Solar subsidies look like being next on DECC’s renewable energy  chopping block.

Amber Rudd, secretary of state at the Department of Energy and Climate Change (DECC), has warned that the government is “looking carefully” at the payments.

Speaking to Solar Power Portal at the official opening of the second phase of Ketton Solar Farm’s 13MW project, Rudd said:

“There has been a lot of subsidy in this area – a lot. More than people anticipated when the feed-in tariffs and the renewable obligation were set up and we have to find ways of supporting solar that doesn’t involve subsidy.”

This comes just a month after DECC announced it will scrap subsidies for new onshore wind projects from 1 April 2016. It also follows chancellor George Osborne’s £3.9 billion stealth attack on renewable energy, effectively making it pay a ‘carbon tax’ by withdrawing the Climate Change Levy exemption.

It also follows Rudd’s bullish post-election statement on solar power: “I want to unleash a new solar revolution – we have a million people living under roofs with solar panels and that number needs to increase”, she told her local newspaper, the Hastings & St Leonards Observer, shortly after her re-election last May.

Responding to the news, Daisy Sands, Greenpeace Head of Energy campaign, told DeSmog UK: “It is deeply worrying that the government looks as though it is about to pull the plug on solar subsidies … Cutting the subsidies now will damage or even destroy the sector.”

Rudd, on Monday, explained that subsidies might be cut for solar due to DECC overspending on the Levy Control Framework (LCF) – this aims to provide certainty to investors while limiting financial impact on those who will ultimately foot the bill for new renewable and low-carbon electricity schemes.

Renewable energy budget ‘overspent’

Fears that the LCF spending cap for green power subsidies will be breached have been circulating for a while, but this week they ramped up further as the Office for Budget Responsibility released its official forecast.

In 2012, the coalition set a cap of £7.6bn for 2020/21. Forecasts now predict that spending will reach £9.1bn by this time, some 20% over the original LCF cap.

“We have to look very carefully at the cost going forward, and I think the industry is expecting that”, Rudd told Solar Power Portal. “I’d like to see solar at grid parity. I’d like to see lots of solar without subsidy – that’s the ideal outcome.”

But Sands argued that the spending had in fact been highly successful at bringing solar costs down, but cutting it now would put those gains at risK: “All the money that has already been invested in the renewable energy industry will be completely wasted if funding is cut.

“Combined with the cuts to wind subsidies, it looks like the government is gearing up for a full frontal attack on the renewable energy sector. Jobs will go and emissions will rise at a time when policies and funding should be in place to ensure quite the opposite.”

These comments are echoed by Jonathan Selwyn, managing director of Lark Energy Commercial which developed the Ketton solar project.

Speaking at the project’s opening on Monday, Selwyn said: “The recent changes in government support means that many large scale solar projects of this type are now not viable. The solar industry is making rapid progress in reducing costs, and will become the first energy source to be subsidy free by 2020.

“However, we would urge the government to provide stability and certainty for the industry as we make the journey to zero subsidy. This will enable us to continue to provide significant new clean energy capacity and maintain the many thousands of jobs in the sector.”

All the eggs into the nuclear basket case

Current government policy on power generation is increasingly focused on new nuclear stations. Although subject to numerous problems, the government intends to pay £92.50 per MWh for power from the proposed Hinkley C nuclear plant, more than double the current average wholesale price of electricity, inflation proofed for 35 years.

Further nuclear plants planned for sites at Moorside, Bradwell and Wylfa will likely demand similar levels of subsidy, along with construction finance guarantees adding up to as much as £50 billion. The overall subsidy for Hinkley C alone has been estimated at over €100 billion.

But with none of these new nuclear projects likely to come on stream until 2030, and solar power expected to be fully cost competitive with fossil fuels by 2020, the policy is looking ever more paradoxical.

Kyla Mandel is Deputy Editor of DeSmog UK. She tweets @kylamandel.

This article was originally published on DeSmog.uk. This version includes additional reporting by The Ecologist.