DTI slashes grants for household solar

A decision to slash grants for solar photovoltaic systems in the re-launched Low Carbon Buildings Programme has met with anger from the renewables industry. The Renewable Energy Association claims it will lead to "job losses and company failures".

The Department of Trade and Industry will relaunch the programme for household micro-renewables on 29 May.

The DTI suspended the fund in March after the £500,000 monthly allocation ran out in less than an hour (ENDS Report 387, p 13 ). Ministers said the suspension was needed because suppliers were struggling to keep up with demand - a charge denied by industry.

In truth, the fund has been a headache for the government since it was launched in May 2006. The initial year’s £3.5 million funding ran out in six months (ENDS Report 381, p 14 ).

There will be no monthly cap on funds under the relaunched programme, but the DTI has introduced several measures to put off speculative applicants.

Householders must now have planning permission before applying for a grant. The Department of Communities and Local Government is consulting on proposals to make micro-renewables permitted developments, but legislation will not be introduced to Parliament until after the summer recess (ENDS Report 387, p 45 ).

The period in which applicants can claim a grant has also been restricted. Before, applicants had six months to complete an installation and could apply for a three month extension. Solar thermal applicants will now have three months, while mini wind turbines and solar PV applicants will have four months.

Two-month extensions will only be allowed where delays result from circumstances outside the applicant’s control, such as supply problems.

These measures have been welcomed by industry. However, the decision to limit funding to £2,500 per household has been criticised. The Renewable Energy Association said it would particularly affect applicants for solar PV systems, who had previously received an average grant of £6,300.

When the LCBP was launched, solar PV was eligible for a grant of up to £15,000.

"While it’s good news that the programme will be back up and running, the scale-back makes a nonsense of the Government’s ambition to bring on-site power to the people," said Philip Wolfe, chief executive of the REA.

"This decision will place renewable electricity beyond the reach of all but the wealthiest households."

Because the change had been made at short notice, "job losses and company failures will inevitably follow", he added.

Grants have also been cut for wind turbines and small hydro - both down from a maximum £5,000 to £2,500. However, these sectors are less likely to be affected.

The popular Windsave turbines sold by B&Q start at £1,498 (ENDS Report 381, p 14 ), so applicants could still receive a grant equivalent to 30% of eligible costs, as allowed previously. And there have only been five grants awarded for small-scale hydro, and none of these have been paid-out yet.

Around £8.4 million is still available under the fund. The DTI says "there will be no further funds and no further measures" to extend the scheme’s life once this is allocated.

So far £3.5 million of grants has been paid for 2,211 installations. Another £6.8 million has been allocated to 4,271 applicants.

Compliance Search

Discover all ENDS content in one place, including legislation summaries to keep up to date with compliance deadlines

Compliance Deadlines

Plan ahead with our Calendar feature highlighting upcoming compliance deadlines

News from ENDS Europe

News from ENDS Waste & Bioenergy