What do the United Kingdom’s Solar Subsidy Cuts Really Mean?

The United Kingdom’s (UK) Department of Energy and Climate Change (DECC) just announced plans for 2016 that will slowly phase out the subsidy programs offered for small solar farms.

In part of this plan, the DECC is also taking a look at their feed in tariff (FIT) program, which seeks to incentivize solar energy rather than charging them for energy use.

According to the BBC, the DECC claims that the solar subsidy cut will protect customers from paying more for solar energy.

The solar industry, however, feels differently, claiming that the subsidies were their means of keeping solar energy affordable for their customers.

One of the key mechanisms that drive subsidies is the Renewables Obligation. The Renewables Obligation is a UK initiative started in 2002 that was designed to encourage and proliferate the use and availability of renewable energy sources within the United Kingdom.

Under the DECC’s new plans, however, small solar farms will no longer apply for this program.

The government attributes to the recent fall of solar energy installation costs.

Due to these lower costs, the DECC feels that the solar energy subsidies are no longer as necessary as they used to be.

Because of this, the DECC feels that it’s time to wean the solar farms off of subsidies entirely.

But what will these changes mean for the future of solar energy in the UK?

Currently, a solar energy system is installed every four minutes.

According to The Guardian if you plan on installing solar panels, you may want to do so before the changes go into effect. If installment takes place before the 30th of September, it’s likely that the customer will receive the previous FIT incentives offered.

For those who already have solar panels installed, not much will change in the foreseeable future; the government announced that they do not plan to cut future payments for another 20-25 years.

According to The Guardian, the UK has over 600,000 homes that are currently powered by solar energy. The government hopes that the DECC’s new changes will only boost these numbers, increasing the use of renewable energy in the United Kingdom.


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