Earlier this month the Department of Energy and Climate Change (DECC) announced that some solar farms below 5MW would no longer receive subsidies after 1 April 2016. This would mean they are not eligible for the Feed-in Tariff (FiT) which pays solar panel owners to generate and export solar energy back to the utility grid. The announcement focused solely on solar farms, meaning it has no effect on the FiT subsidy for domestic rooftop solar at this time.

Why has the government announced cuts to solar farm subsidies?

The decision to end subsidies for small solar farms comes for multiple reasons. The government has explained that the Renewable Obligation scheme has seen a much higher take-up than expected, with the BBC quoting Energy Secretary Amber Rudd saying 'We can’t have a system, which we’ve had up to now, where there is basically unlimited [subsidy] headroom for new renewables, including solar'. The strong uptake has put the Levy Control Framework budget on course to overspend by £1.5 billion. These cuts also reflect the idea that some renewables are able to survive without subsidies thanks to the falling costs of solar installations over recent years.

Will domestic rooftop solar be affected?

Currently, there have been no plans outlined by the government to slash subsidies for domestic rooftop solar. Although the FiT rate for domestic solar installations has fallen since its introduction, the cost of having a solar array installed is now less than half of what it was in 2010, meaning solar is still a great investment for homeowners.

Further information about the cuts and changes to renewable subsidies can be found through GOV.UK