Thanks to the dramatic fall in the cost of solar and the huge level of deployment under the coalition Government, solar can now be at the forefront of the transition to the new contracts for difference support mechanism, which had support in the Division Lobby from the whole House. The detail of the changeover from the renewables obligation is crucial, so we are carefully engaging with industry during the consultation period to ensure that we get the details absolutely right.
Solar PV and onshore wind are two of the cheapest large-scale renewable energy sectors. Does the Minister accept that cuts to solar, coming off the back of his party’s promise to impose an effective moratorium on onshore wind, will lead to higher energy bills?
The hon. Gentleman is somewhat misled. We are certainly not proposing cuts to solar. We are putting solar at the forefront of our transition to contracts for difference, which set out the growth path for all renewable technologies well into the next decade. We are seeing tremendous growth in solar and our ambitious solar strategy will ensure that that continues for years to come.
Our flagship energy efficiency measure is the green deal, which is supported by the £1.3 billion per annum energy company obligation. We are making very good progress towards its introduction, which starts this autumn, and we expect roll-out to grow strongly in 2013 and beyond, bringing new entrants, greater competition, consumer choice and innovation to this growing market.
A crash programme to insulate every home in Britain would save millions of people money on their fuel bills and keep them warm in the winter. It would also be billions of pounds cheaper than investing in nuclear power. Will the Government undertake a rigorous cost-benefit study of these alternatives?
The hon. Gentleman is absolutely right. Energy efficiency is a no-brainer. That is why we have given unprecedented importance and attention to it and for the first time have created within the Department an office of energy efficiency deployment. The green deal will involve a far greater range of interventions in people’s homes, unlike previous programmes, which were very limited, so I think the green deal will achieve the aims he seeks.
It is not the most highly subsidised form, although it is one of them. It is certainly true that, per unit of electricity generated, the domestic rate of 16.5p is still substantially more than the rate given to onshore, or indeed offshore, wind, for example. The really exciting thing is the speed at which we anticipate the costs continuing to fall. Using a crystal ball, particularly in the Chamber of the House of Commons, is never a very good idea, but I think that industry experts are increasingly saying that we can reach grid parity by the end of the decade, and many others say that it could come a lot sooner. That is why I am determined that, unlike under the previous Government, when it was treated as a cottage industry for anoraks, solar will be a major part of our energy strategy.
The fact is that Britain is years if not decades behind Germany across the whole field of renewables in general, and solar in particular. That is down to the baleful influence of the six big energy companies, which have had a hold over successive Ministers, successive Governments and, above all, officials in the Department of Energy and Climate Change. When will the Minister tell his officials to look at Germany and imitate here what the Germans do?
It is extraordinary that the hon. Gentleman has managed to blame officials in my Department, the big six energy companies and practically everybody else he could think of, apart from the people who ran the country for 13 years and the last Labour Energy Secretary, who is now Leader of the Opposition. I will tell him why we were third from the bottom of the renewables league table and why we inherited a disastrous position on the solar scheme. It is entirely due to the incompetence, mismanagement and laziness of the last Government.
I take my hon. Friend’s point extremely seriously, as do my colleagues. That is why we have a programme looking at the sustainability of the supply chain. I would be happy to welcome him to the Department to meet our officials so that we can fully address any concerns he might have on the matter.
The best low-carbon technology is probably insulation. A recent report on energy conservation suggests that we could save the economy more than £1 trillion by investing in insulation instead of in nuclear power. Has the Minister looked at that report?
I agreed with every word, almost until the end of the hon. Gentleman’s question. He is right that energy efficiency, including insulation, is an absolute no-brainer. We have failed to do as much as possible in the past. With the green deal and the energy company obligation, we hope to transform the energy efficiency of homes and businesses in the UK.
(12 years, 9 months ago)
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I am not aware of that particular paper, but I have to say that I remain a fan of solar. The issue is about the cost of solar. The fact is that it currently attracts four times as much subsidy as any other form of renewable generation. It is not viable to have a mass roll-out of that technology when costs are still that high. We need to bring the costs down. When we get to that point, we will see a mass roll-out in the UK—but not before costs have been brought down further.
The Minister has not answered one important point made by my right hon. Friend the Member for Don Valley (Caroline Flint)—that he has buckled under pressure from the big six energy producers. Is it not the truth that they make money out of selling electricity and they do not want competition?
That is why, unlike the previous Government, we are bringing forward transformational proposals as part of our electricity market reform. We have already had one Energy Bill in this Parliament; another will be along shortly.