The government has announced that it will be removing subsidies previously granted for solar thermal energy technology on the grounds that it is not cost effective and, as a “mature” industry, can cope without the financial support.
Solar thermal technology involves using energy from the sun to heat up water, providing hot water and heat to a household in an environmentally friendly manner.
Up until now, financial support was claimable for those using solar thermal technology (as well as other forms of renewable heat provision such as biomass boilers) to heat their house under the renewable heat incentive (RHI) scheme. The RHI forms part of Energy secretary Amber Rudd’s plan to “achieve and energy system that is secure; affordable; and clean” given that “heat accounts for almost half of UK energy use and a third of UK carbon emissions.”
However, it was announced on Thursday that the RHI framework would be reformed in order to “rebalance the scheme and ensure it delivers its objectives in a manner which is affordable and offers value for money.”
According to the investigation into the effectiveness of RHI that led to the reforms, solar thermal schemes are the most expensive and “least cost-effective of the four technology types” involved. Further, “around half of owner-occupier applicants” who are using solar thermal technology “said they would have installed it anyway”, whether subsidies were offered or not.
“Taken together” the report went on, “these two factors suggest that solar thermal represents poor value for money for taxpayers.”
With solar thermal therefore considered a mature technology, Rudd’s Department for Energy and Climate Change believe that the money invested in RHI would be better used to promote other, newer (and more cost-effective) technologies, including biomass and heat pumps.
Paul Barwell, head of the Solar Trade Association, disagrees with the cuts.
He said: “With UK renewable heat deployment falling desperately behind target, government should be full square behind this technology as part of a strategic plan to permanently bring down heating costs for British families.
“Discriminating against this globally important technology in the UK would send a terrible message to householders, and it would have very serious ramifications for the British solar thermal sector.”
Currently, solar thermal technology accounts for around 2% of the energy produced under the RHI, but takes up around 17% of the subsidise capital.
The government document explaining the proposed reforms said:
“The government believes that solar thermal may have a role going forward in decarbonising heating. Even though solar thermal currently requires the highest subsidy from Government it has the lowest upfront costs for customers and can be deployed in many homes which may provide a simply way for all to generate some level of renewable heat…However, we do not believe that these arguments are sufficient to justify ongoing RHI support.”
Essentially, the department is fully behind solar thermal technology, and the cutting of subsidies does not represent a disavowal of it. Rather, the money used for subsidies could be more effectively used to promote other technologies, while solar thermal tech can survive without, given, amongst other things, its low cost to begin with.”