Cuts to renewables tariffs 'less than expected'

The NFU is pleased that the Government has responded to feedback from stakeholders, including the NFU, and has moderated the extent of the cuts to small and medium scale solar tariffs. Medium-sized rooftop solar power remains an excellent low-risk investment for many farmers with substantial electricity bills – we estimate that good returns (10-11%) are achievable for 49-kilowatt PV roofs where over half the electricity generated is used on site.

While we dislike the “capping” of renewables deployment, we are pleased that “queue management” will be introduced by restoring a system of tariff guarantees to projects over 50 kW, bringing stability to the pace of deployment. However, farm wind projects will continue to struggle against both the planning system and harsh economics, while the absence of any new Feed-In Tariff rates for anaerobic digestion cast a pall of uncertainty over delivering multiple environmental benefits through on-farm AD.

The NFU also remains concerned at the apparent disconnect in policy between recent Government statements at the Paris climate talks and the harsh cuts to support imposed upon fast-growing clean energy technologies. We continue to call for long-term consistency in low-carbon energy policy – including support for the wide range of land-based renewables and new technologies like battery storage.

The decision to end ‘grandfathering’ of support for solar farms, expecting investors to shoulder the risk of unpredictable returns, does not make sense for an energy source that is fast becoming the cheapest form of new generation. Farmers in England and Wales stand to lose out as developers shift their focus to Scotland, where more consistent support remains available. However, subsidy-free ground-mounted solar remains a near prospect, and the industry has shown time and again how adaptable it is to a changing energy policy landscape.