Solar energy projects shelved after subsidies cut

STV
Solar panels: Committee told of 'investment hiatus'.© STV

Renewable energy projects aimed at helping some of Scotland's most vulnerable people have been shelved because of the UK Government's decision to cut subsidies for home solar panels, Energy Minister Fergus Ewing has said.

Mr Ewing told Holyrood`s Energy Committee that the move has resulted in pre-approved renewables projects being put on hold.

He also said the UK Government's fight to reduce feed-in tariff subsidies (FITs), payments made to households and communities which generate green electricity through solar panels, has also resulted in "major projects" being delayed.

Energy Secretary Chris Huhne has pledged to fight on after losing a bid in the Court of Appeal to reduce FITs on any installations completed after December 12 2011.

Mr Ewing said he has urged Mr Huhne to make an exception for solar projects in social housing.

He said: "I have particularly urged Chris Huhne to consider the case for social housing and the work being done by housing associations in Scotland along with industry to apply solar PV (photovoltaics) to social housing in Scotland.

"I understand from the meetings that I've had, and the very detailed discussions that I've had with a number of companies, that quite major projects were being contemplated in Scotland.

"It would be very sad indeed if those very useful projects for the most vulnerable in Scotland, or amongst the most vulnerable, can not go ahead because of this."

Mr Ewing said he is also concerned about the "investment hiatus" by companies awaiting the outcome of the UK Government's energy market reform programme.

He said: "I think it is just a matter of fact, it's not a political point, to say that as long as these matters are unresolved then it's impossible for many investors to decide whether to invest. Before they can be expected to invest hundreds, or thousands, of millions of pounds investors need to know what the ground rules are. That's a statement of the blindingly obvious."

The committee heard earlier from Charles Hendry MP, a UK energy and climate change minister, who said the UK Government had been "forced" to reduce subsidies for home solar power.

He said: "To look at the Scottish perspective, between July and October the number of small installations went from 2000 to 5000 and from October to December they went from 5000 to 12,000.

"That was the total number of feed-in tariff installations in Scotland, 11,000 of those 12,000 were PV.

"So we had seen a massive growth rate, which was threatening to take up the entire budget for a four-year period in one year, and we needed to act because this is paid for by a charge on people's bills.

"The changes that we made are going to save £100m a year on people's bills. We're particularly aware of the fact that in Scotland people's bills are often higher because they need to heat their homes for a longer part of the year.

"So the Scottish consumers will gain, pro-rata, more than in other parts of the UK."