Two million British homes could get their electricity from the sun by 2020 under multi-million-pound government subsidy plans targeted at households that fit solar panels.
Greg Barker, the climate change minister, wants to reform a scheme set up by the previous government which was designed to promote solar power for householders and small businesses. He believes the scheme has been exploited instead by City investors who he says were making “bumper profits” at consumers’ expense.
This is because people who generate solar power can claim subsidies of up to 40p for each kilowatt hour of electricity generated — four times more than the cost of buying electricity via the National Grid. In the past 18 months, however, the cost of solar panels has declined sharply, allowing investors who set up solar farms to reap vast profits.
Barker said: “These subsidies should not be vacuumed up by the City. They should go to small users.” It means solar power will remain the most highly subsidised of all renewables, with the money being raised by a general levy on power bills. Barker believes the 2m target will be reached provided prices keep falling.
Leonie Greene, of the Renewable Energy Association, said focusing on homes and small businesses could exclude schools, housing organisations and community groups. “Solar has incredible potential ... we should increase our solar ambition in line with other EU economies,” she said.