Drastic government cuts to solar subsidies are damaging investor confidence

Investor confidence in renewable energy is being damaged by "sudden and unpredictable" government announcements, a group of MPs has warned.

In a letter to Energy and Climate Change Secretary Amber Rudd, the parliamentary committee overseeing the area said it was "regrettable" the Government was reducing support for renewable energy just days after the UK backed an historic climate agreement in Paris.

They also raised fears about cuts of almost two-thirds to support for domestic solar arrays and a £100m ($149m) cap on spending for small-scale renewables schemes up to 2019.

"The most alarming issue is the damage to investor confidence in the renewable energy sector resulting from a sudden and unpredicted series of announcements, combined with what have been perceived as rushed consultation processes," committee chairman Angus Brendan MacNeil wrote.

The more risky a prospect that investors perceived the UK to be, the more costly it will be, he said, adding that it needed their confidence to deliver the required investment in energy infrastructure to meet goals on energy security and climate change.

The MPs also expressed concerns that between 9,700 and 18,700 jobs were at risk as a result of the changes to the "feed-in tariffs" subsidy scheme which were announced on Thursday 17 November.

While the Government has said the cuts to solar subsidies are necessary to curb rising consumer bills, MacNeil warned that the UK would "not hit our decarbonisation targets if the deployment of renewable energy schemes slows and we will not deliver it more cheaply if investor confidence continues to be diminished".