Cutting solar subsidies will hit cost the Treasury millions claim REA

The Renewable Energy Association (REA) has warned that Government plans to cut Feed-In-Tariff subsidies could cost the Treasury £94m in lost tax revenue.

The REA has estimated that proposals to reduce subsidy rates for solar energy could result in 15,000 job losses.

According to the organisation, this will represent a net loss to the taxpayer of £94million in terms of lost tax and National Insurance revenue, and welfare payments.

This does not include loss of Business Rates for local councils and VAT and Corporation Tax income to the Treasury. 

“The Government’s sudden reversal of support for solar and other emerging renewables technologies ignores the substantial benefits that a healthy renewables industry provide to UK employment and the public purse,” said the REA’s Head of Policy & External Affairs, James Court.

“Our recent solar report shows how the technology can reach gird parity but this relies on continued Government support.”

The new research comes as the Government faces fresh criticism over its plans to reduce FIT support.

Shadow Foreign Secretary Hilary Benn has published on open letter on his website after constituents contacted him about the issue.

Mr Benn said he shared his constituents’ concerns that the Conservative Government has “undermined solar energy”.

“The UK has fallen behind France, India and Japan in terms of renewable energy investment attractiveness,” he said.

In addition, the Solar Trade Association (STA) has joined a number of organisations calling on the Government to reconsider their FIT proposals after consultation with the industry and stakeholders 

"The Government's proposals for British solar are extreme and they are damaging for both the industry and for consumers,” said the STA’s Head of External Affairs, Leonie Greene.

“Solar puts people and communities in control and the Government should back that - not take power from the people. It doesn't have to be like this, so we are reassured that so many organisations, from all walks of life, are joining our call for a rethink."

Jamie Hailstone is a freelance journalist and author, specializing in local government, transport and energy issues