What Does The Government’s Cuts On Large Scale Solar Farms Mean?

In May the Government unveiled plans to limit subsidies to large scale solar farms across the UK which aims to come into effect as of April 2015. Empower Energy the renewable energy experts outline below what changes we can expect to see and what they mean Under the new proposal, projects which are larger than 5 megawatts (MW) will need to compete with other renewable energy projects for funding.

To provide you with an idea of size; a 5MW will typically need around 25 acres of land in order to be installed. In terms of energy produced, for every 5MW installed that will provide enough power for over 1,500 homes for an entire year. As it stands there is 2.7GW of PV capacity in the UK, which is enough to power 620,000 homes, which is projected to increase to 10-12GW by 2020. The Department of Energy & Climate Change (DECC) has indicated that it is actively encouraging the growth of solar PV within the UK, and has published a solar strategy.

Under the existing regulations PV installations are subsidised through the Renewables Obligation system, in which earns land owners £1,000 per acre per annum for 25 years. The Government are now looking to end the system two years early, and is making any PV installations larger than 5MW compete for subsidies via the new ‘contracts for difference’ system. One of the reasons behind this change is because The DECC is keen to encourage growth in deployment; a part of the sector which has not seen the same levels of growth as solar farms has The DECC has also stated that it wants to encourage small scale developments and community energy generation, which will benefit under the new scheme. Along with this The DECC are looking for more ways to create green affordable energy, whilst reducing the overall impact on the environment, countryside, and relative eco-systems.

So what does it all mean?

PV installations over 5MW will need to compete for subsidies Small scale and community-owned schemes will benefit PV installations under 5MW will still be able to apply for subsidies.Remember that the new system will only affect PV installations over 5MW, and therefore for smaller land owners solar farms are still an ideal investment.

Solar farms are a great way to make the most of land which is of too poor quality to grow crops or rear livestock, whilst providing a lucrative return on investment to the land owner. Since the proposals have been announced the solar industry has hit back, and is now taking the Government to court for judicial review over the matter. As you can see the solar industry is rapidly changing, so for the very latest information it’s always best to get in touch with the experts. To find out more about investment in solar farming or for any other queries you may have about starting your investment in commercial solar, then please contact our friendly team or call us on 01425 461 461