UK government cuts home solar rewards by 65 percent

The DECC will cut payments from 12.47p per kilowatt hour to 4.39p from next month.

greensambaman, Flickr

As part of its commitment to renewable energy, the UK government offers financial contributions to those who have solar panels installed at their home. This "Feed-in Tariff" pays homeowners to generate their own power, which not only feeds the appliances in their home, but can also then be sold back to the grid by way of an "export tariff". Currently, the Feed-in Tariff sits at 12.47 pence per kilowatt hour, but the Department of Energy and Climate Change (DECC) confirmed today that payments will be reduced to 4.39 pence from next month, a drop of 65 percent.

Early proposals had called for a reduction of 87 percent, but Amber Rudd, the energy and climate change secretary, softened the blow after facing pressure from The Solar Trade Association and Greenpeace. Both bodies have warned that the cuts could result in a loss of jobs in the solar installation trade and affect the UK's overall commitment to green energy. The government argues subsidies should be "temporary, not part of a permanent business model" and says that solar panels are now a lot cheaper to install.

Today's announcement comes just days after ministers reached an agreement with other world leaders to increase their commitment to low carbon energy at a climate change conference in Paris. Earlier this year, the government began pulling support for new onshore wind farms in a bid to help companies "stand on their own two feet" and "not encourage a reliance on public subsidies."

Solar is seen as one of the cheapest and most practical ways for consumers to generate renewable energy. With incentives set to drop in January and the Feed-in tariff scheme limited to £100 million, the government believes the industry is now big enough to stand on its own two feet. Industry figures, however, believe they'll be forced to run before they can walk.