Reducing subsidies for large-scale solar installations, as the government had done today, is intended to increase the number of panels on house roofs. However, the Guardian has learned of dozens of examples of projects, often community-led, that will not now go ahead because the cuts – subsidies on some schemes have been slashed by two-thirds – mean the returns on investment now being offered are insufficient to attract bank loans or other forms of financing.
Wadebridge Renewable Energy Network would have created “solar allotments” where residents could generate a third of the community’s electricity needs by 2015, along with an income of up to £100,000 a year that would pay for the installations with the remainder re-invested in other local environmental schemes. “We believed we had a winner – significant power generation to impact on energy needs, a sizeable community fund to meet local needs, and local ownership by means of shares,” said Tony Faragher, a local volunteer. “So it is extremely disappointing that the solar allotment scheme will inevitably collapse … the project will simply be non-viable with the proposed reduction in feed-in tariffs. We find it difficult to understand and accept this perspective.”
Dawn Muspratt, involved in another community scheme called the Power Exchange in Hastings, shares this view. “A small team of us have created a social enterprise aimed at using renewable energy to benefit people living in fuel poverty in the UK,” she explained. “The essence of the idea is to generate the electricity needs of people using prepayment meters and to use that electricity to off-set their use. As the majority of our customers will either not have roof space or will not have security over their properties, we are using ground-based [solar panels] as the route to market.”
The low-income households that would have benefitted are now unlikely to be able to access the subsidies. When the government announced its change of heart in February, ahead of the consultation and review published on Thursday, funding for the project dried up. “We lost funding for proof of market research and some of our investors started to look jumpy,” Muspratt explained. “The proposed tariff rate for ground based and ‘large scale’ solar is hopeless and we are not sure that our model can sustain the new rate.”
Community Energy Warwickshire, a locally formed group, was hoping to put in place 120 kilowatts (kW) of solar panels, spread over two hospitals. The group said the panels would have reduced the hospitals’ energy use, with the savings spent on patients. But the cuts mean the project has been more than halved.
The South Yorkshire Housing Association, in Sheffield, is also re-evaluating its proposals for community solar installations. One development already in place benefitted homeless families, in a rehousing scheme. But instead of providing a single installation that would have provided energy for 25 families, the anticipated changes to feed-in tariffs meant each house had to be supplied separately. This was much less cost-effective than treating the community as a single installation, the Association said. “But it was the only one which we were confident would receive funding,” said Craig Jackson.
In Brighton, a cooperative was planning several community-owned installations of 100kW each, with the income to be reinvested in more renewable energy and energy-saving. Damien Tow said the changes made the plans “economically unviable”, and the group would have to try to find locations suitable for smaller installations, in order to reap the maximum subsidies under the reformed government tariffs. The group has calculated that community installations need to be up to 300kW in capacity in order to be viable, but this is five times more than the government is now allowing on the maximum tariff.