Solar power has lost out in the UK’s government auction for subsidies on renewable energy in the first allocation round.
The government announced today which companies and technologies have won green energy contracts in the Contracts for Difference scheme introduced last year by the coalition.
Renewables had to bid against each other for a share of a £50m pot for the next year, which rises to £65m in future years. A second fund for 'less established technologies' will also be allocated from 2016, worth £155m initially and then £260m, making the total fund worth £325m a year from 2017 to 2020.
The 2015 auction allocated subsidies, paid from consumer bills, to 27 renewable electricity projects with a combined capacity of 2.1GW, which the government describes as enough to power 1.4 million homes, equivalent to all the households in Wales.
The solar power industry said it has suffered a significant blow from its cut in support and lost out in an auction which favoured bigger players over the smaller businesses that are generally behind solar farms and large-scale arrays.
“Unfortunately this result is as disappointing as we predicted,” said Paul Barwell, CEO of the Solar Trade Association. “The soon to be cheapest and most popular renewable, solar power, has lost out in a complex auction scheme that favours big players and genuinely established technologies.”
The contracts being offered include two offshore wind farms, which could deliver over 1.1GW of new capacity, 15 onshore wind projects and 5 solar projects.
“The auction has driven down prices and secured the best possible deal for this new clean, green energy,” Ed Davey, energy and climate secretary, said.
Offshore wind, still in relative infancy, is the biggest winner with 1,162MW receiving public support to 2019. Onshore wind will get support for 749MW and solar for just 71MW.
Contracts for Difference (CfD) are the new support mechanism for nuclear, combined capture and storage (CCS) and renewable energy, replacing the main support for large-scale renewables, the Renewables Obligation.
Taking about the scheme Barwell said it "trips up" the UK’s emerging solar industry and questioned whether it was “really a successful policy”.
“It is essential that changes are made to the next round of auctions in October to ensure that smaller UK solar companies can have the confidence to enter. “