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Cameron Curbs Solar in U.K.’s Rural Areas With Shift in Subsidy

Louise Downing, Bloomberg

Changes to U.K. support for solar power will deter farmers from building projects in rural areas as Prime Minister David Cameron’s government says the countryside is being blighted by unsightly panels.

The government now requires many solar plants to bid for so-called contracts for difference in an auction instead of, in the old system, simply offering support to developers who satisfied the rules. The switch reinforces a program started in October to remove subsidies for farmers that use solar.

The new regime means solar parks will compete directly against cheaper onshore wind instead of receiving a specific allowance for power that comes from the sun. Developers say that will hurt the economic case for building solar farms in Britain, among the hottest markets for the technology in Europe. 

Britain is promoting the use of solar panels on rooftops, easing planning curbs for facilities of as much as 1 megawatt.

“It appears by making the contracts-for-difference auction process technology agnostic, the government doesn’t really want any more big ground-mounted solar projects as they can’t compete with onshore wind at this point,” Stephen Lilley, a partner at Greencoat Capital LLP, said in an interview. “It appears to want solar panels on roofs.”

With solar about 60 percent more costly than wind on land, the technology will lose out in any head-to-head competition. Solar will be further handicapped as facilities larger than 5 megawatts, unlike onshore wind, won’t have the option to choose to stay with the old Renewables Obligation program until 2017.

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