The Feed in Tariff (FIT) has been a huge success. It has enabled hundreds of thousands of homes, communities and businesses to generate their own energy. It has also, remarkably, led to the price of solar power tumbling to a point where it is close to competing without subsidy.

The government is now proposing dramatic cuts in a review of the FIT that risks bringing this success story to a halt. These cuts will save the average household £6 per year on its energy bill by 2020/211 - equivalent to 0.4 per cent of the average £1,369 family dual fuel bill - whereas fossil fuel subsidies currently cost every person in the UK £400 per year2. The government's Impact Assessment notes that jobs will be lost3 as a direct result of the proposals. Communities, schools and businesses up and down the country will also be prevented from generating their own energy.

The government is right to target a subsidy-free renewable energy sector. However the proposed 87 per cent cut in support for small-scale renewable energy, combined with tough caps on total amount of projects, will be devastating to the industry. If we are to reach a stage where subsidy-free renewable energy is a reality then a more steady reduction in support is necessary.

To inform this debate and the Review of the FIT, Regen SW has set out below evidence of the actual cost to consumers of renewable energy subsidies and the economic and employment benefits generated in return. The briefing concludes with recommendations for the FIT Review that would allow millions of households and businesses to benefit from low carbon energy and stable bills without the need for public subsidy.


Published: September 2015