Solar Power (Feed-in Tariff)

Ben Bradshaw Excerpts

Wednesday 23rd November 2011 Commons Chamber

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes that the previous administration only introduced a feed-in tariffs scheme following pressure from Liberal Democrat and Conservative hon. Members; further notes that during the period up to October 2011 over 120,000 UK solar installations had been completed; further notes that this is three times the deployment expected by the previous administration; recognises that no commercial-scale solar PV schemes were expected by the previous administration; further notes that the cost of PV panels has fallen by at least 30 per cent. since the current tariff was introduced and that the previous administration set the tariff levels for solar PV to deliver a five per cent. index-linked return; regrets that the previous administration did not draw on the experiences of Germany in setting a sustainable and predictable digression of tariffs; further notes that failing to act could add £26 to the domestic electricity bill of all consumers in 2020 including the 5.5 million people left in fuel poverty by the previous administration; further regrets that the previous administration did not introduce a community tariff; believes that the Government is right to bring the tariff levels back in line with the rates of return envisaged; acknowledges that it is right to link support under feed-in tariffs to energy efficiency and the Green Deal ensuring the most cost-effective carbon abatement measures are introduced first; supports a consultation on the introduction of a community tariff; and further believes that the Government is putting feed-in tariffs on a long-term, fair and sustainable footing.”

We find ourselves here to debate a motion that would add at least £26 to an average consumer bill—that is, if we were to leave the scheme unchanged. The estimates are constantly being revised, and the figure may well reach as high as £80 on the current trajectory. The proposal would give bumper profits to solar companies and do little to tackle climate change. There seems to be no awareness whatever on the part of the right hon. Member for Don Valley (Caroline Flint) or other Opposition Members that those are real costs, being imposed on real people, who will be unable to spend the money on other goods and services as a result. Every corner shop across the length and breadth of the land would be affected if disposable incomes were hit in that way. Some of the people who are in the greatest fuel poverty—about whom Labour Members are meant to be most concerned—will be most affected by these increases.

Feed-in tariffs have been successful. They have helped many people produce green energy locally, which is why, before we were coalition partners, Liberal Democrats and Conservatives supported their introduction. Solar energy has been particularly popular, with more than 140,000 homes now generating some of their own electricity. Unfortunately, this promising scheme was built on shaky economic foundations. In setting the returns, the previous Government completely underestimated the potential for cost reductions in the sector. They assumed that solar panels would cost just 9% less to install in 2012 than they would in 2013. As we heard from the right hon. Member for Don Valley, Labour did not propose to review this matter before 2013. In fact, costs are falling and falling fast—at least 30% since the scheme started. The result is that returns on solar photovoltaic investments are double what was originally envisaged.

[Mr Ben Bradshaw (Exeter) (Lab)]

What would the Secretary of State say to a company in my constituency, Sun Gift Solar—one of many in Exeter and the south-west that has contacted me—which clearly told me that its customers do not have any trust in what it calls this “erratic and inconsistent Government” whose actions have already immeasurably damaged confidence in this industry and will put tens of thousands of people back on benefits?

[Chris Huhne]

I do not accept that at all. I will come on to some of the flaws in the original design of the scheme. I think it is regrettable that the Leader of the Opposition is not in his place alongside the right hon. Lady to defend the scheme that he introduced. I am going to be very clear—I am not going to pull my punches—about the mistakes made by the right hon. Member for Doncaster North (Edward Miliband) when he was Secretary of State for Energy and Climate Change and this scheme was introduced. I will deal precisely with that.

The right hon. Member for Exeter (Mr Bradshaw) has just mentioned an investor in his constituency, so let me quote another—Martin Bleasby, the business development manager of Driffield-based Dodds Solar who said:

“It was clear something had to happen. It was never supposed to be a get-rich-quick scheme. The way things were going, the budget was going to run out in a few months. Now we can look at building a business which is sustainable for years to come.”