The UK Department of Energy and Climate Change (DECC) is planning to close the Renewables Obligation (RO) for more than 5MW of solar developments from 1 April 2015 across England, Wales and Scotland.
The DECC said that it proposes to continue RO for solar projects below 5MW of capacity and these are not eligible for the new Contracts for Difference (CfDs).
The developers of solar projects above 5MW are now required to apply for support under the CfD auctions.
This move is intended to protect the Levy Control Framework, which sets the total budget for renewable power projects under FITs, RO and CfDs.
According to DECC, recent growth in the large-scale solar sector, fuelled by RO support and the small scale Feed-in Tariff (FIT) scheme, has absorbed higher budget than the UK Government's expectations.
Currently, the UK has 2.7GW of solar photovoltaic capacity, which is enough to power 620,000 homes, and it is an important part of the UK's energy mix.
The Renewable Energy Association chief executive Dr Nina Skorupska said, "Solar power meanwhile is subjected yet again to devastating instability. The government must ensure that policy drives and rewards technology cost reductions with a stable trajectory of gradually declining financial support, not the cliff edge the government is proposing for solar."
The Solar Trade Association CEO said, "The industry will be alarmed by these proposals and surprised to be singled out for harsh treatment. It does look like the government is seeking to define the energy mix and hiding behind the false excuse of 'budget management'."
According to the STA, these proposals are highly complex and will have an impact on small and medium enterprises, which are prevalent in solar, compared to big utilities.
Image: UK to cut down renewables obligation for large scale solar projects. Photo: courtesy of Naypong / FreeDigitalPhotos.net.