THE solar power industry accused the Government of undermining the development of renewable technologies, after it emerged they would have access to just £50m of annual funding.
A total of £205m a year will be available to some of the major forms of renewable energy from this autumn, affecting the funding of schemes from wind and solar farms to biomass-burning power plants.
The money will be available under the Government's so-called “contracts for difference”, which subsidise renewable energy companies that offer electricity at a lower rate of carbon emissions than fossil fuel generators, and are paid for by levies on household energy bills.
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The auction of contracts-for-difference will take place in October, with deals worth an annual £50m available to established technologies such as solar and onshore wind power, the Department for Energy and Climate Change said.
Another £155m a year will be granted to newer generation forms, such as offshore wind, wave and tidal power.
“These projects will create green jobs and green growth, reduce our reliance on foreign-controlled volatile energy markets and make sure bill payers get the best possible deal,” said Energy Secretary Ed Davey.
“Average annual investment in renewables has doubled since 2010, with a record-breaking £8bn worth in 2013.
“Our plan is powering growth and jobs as we build clean, secure electricity infrastructure for the future. By radically reforming the electricity markets, we’re making sure that decarbonising the power sector will come at the lowest possible cost to consumers,” added Mr Davey, who predicted there would be 250,000 jobs in the UK’s low-carbon energy sector by the end of this decade.
But some renewable companies said the spending represented a large reduction in the support they receive, and could lead to far fewer low-carbon installations being built.
Trade body RenewableUK, said the level of funding was disappointing.
Dr Gordon Edge, its director of policy, said: "Whilst the industry understands the pressures facing government when setting this budget, we are disappointed with the overly cautious approach used.
"Although we appreciate that it’s necessary to hold back budget for future years in order to allow potentially cheaper projects to come forward later, this initial release of the draft budget risks being insufficient to drive industrialisation, competition and cost reduction."
Leonie Green at the Solar Trade Association, said the amounts to be devoted to renewable energy were dwarfed by the £80bn guaranteed to the nuclear industry under a similar contract struck by the government.