Solar Industry

Catherine West Excerpts

Tuesday 5th March 2019 Westminster Hall

[Antoinette Sandbach]

There are huge changes coming forward in battery technology. Of course, battery technology will be the key not only to solar energy, but to small-scale wind projects, particularly in relation to how we harness and store such power. There are a number of new and exciting technologies in renewable power. As someone who is keen to see as much of our power as possible coming from renewable sources, I know that the Government are committed to looking at how we can encourage those kinds of projects to go forward, and in the battery sector there is the Government’s Faraday battery challenge.

Given the prospects outlined by SolarPower Europe’s global market outlook, it is clear that the sector needs some positive news, and I hope that the Minister can deliver that today. However, businesses need reassurance more than anything. The Government have been consulting on the replacement to the feed-in tariff regime: the smart export guarantee. The consultation on that measure closed just over four hours ago. However, the export tariff, which is a key part of the FIT, ends on 31 March, which leaves just 18 days to resolve the questions surrounding a replacement before we risk falling into the void that will be created between the old policy closing and the new one beginning.

I welcomed the Minister’s reassurance last November that

“solar power should not be provided to the grid for free”.—[Official Report, 20 November 2018; Vol. 649, c. 701.]

However, there is a risk that that is exactly what will happen if there is a gap between the two schemes, so I would like her to give some reassurance that the replacement scheme will be fully operational in time. This should be a baseline to build upon, not a standard to live up to. What the sector really needs is a minimum floor price.

[Catherine West (Hornsey and Wood Green) (Lab)]

I thank the hon. Lady for her excellent speech. Does she agree that some schools and voluntary sector organisations are really getting involved in this kind of green initiative, and that small businesses in particular could be affected adversely if the scheme should fail and the recommendations are not taken up fully by the Government?

[Antoinette Sandbach]

The Minister will have heard the hon. Lady’s comments, and I hope that she takes account of them, because a minimum floor price would put the sector on the same footing as the offshore wind industry, which benefits from the certainty that contracts for difference provide, and fossil fuel investors, who benefit from the capacity market.

--- Later in debate ---

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I know that you take a strong interest in these matters on behalf of your constituents in Kettering. I warmly congratulate my hon. Friend the Member for Eddisbury (Antoinette Sandbach) on securing the debate and putting forward, as always, an excellent, well-informed set of points, which have been responded to and added to by the knowledgeable group we have here today.

I will not do the usual context setting, which is that we are doing well on the whole agenda. Renewable energy is now up to more than 32%, and emissions continue to fall rapidly. In fact, the last time our CO₂ emissions were this low was in 1888, when Queen Victoria was on the throne. That is absolutely worth celebrating.

[Catherine West]

Will the Minister give way?

[Claire Perry]

I want to respond to the points made by my hon. Friend the Member for Eddisbury, but of course I will accept the intervention.

[Catherine West]

I thank the Minister for being so generous with her time. Will she also congratulate the Greater London Authority and the Mayor of London on the London community energy fund, which helps to promote this sort of initiative?

[Claire Perry]

I will touch on that good point about community. Many good schemes operate across various local authorities.

The feed-in tariff scheme has been an effective part of our great decarbonisation journey. Since 2010, the scheme has supported more than 830,000 installations, 99% of which are solar and are currently generating about 3% of total electricity consumption. Also, a few things have changed since that time, as the hon. Member for Hornsey and Wood Green (Catherine West) will know. We have seen a dramatic fall in the cost of solar installation—up to 80% in some cases—which is to be welcomed, as it makes that more accessible to many people. We have also seen a dramatic fall in the cost of other renewable energies.

I like the phrase the hon. Member for Warwick and Leamington (Matt Western) used: the democratisation of energy. We are all participating, and one of the great benefits is that the hugely important technology that is offshore wind now costs the same, effectively, as building a new gas-fired power plant. That is a benefit to us all and to all our bills.

The feed-in tariff scheme has cost us almost £6 billion to date, and over its lifetime it will continue to cost us all about £30 billion, on many of our bills. It was absolutely right, therefore, that the decision was taken—before my time—to close the scheme. As we move to a lower-cost solar environment, and to a world in which we are rapidly seeing price parity between renewables and non-renewables technology, it is important to think about the impact on bills.

--- Later in debate ---

[Catherine West]

rose—

[Claire Perry]

I will come to the hon. Lady’s point in a second.

I talked about jobs and the opportunity for skilled workers to pursue careers in this sector. Not only is there ongoing growth in solar, but so many other opportunities are emerging: electric vehicles, charging infrastructure, smart appliances and battery technology are all working to decarbonise our buildings and our transport systems. The opportunity for green-collar jobs is enormous; we already have almost 400,000 people in the UK working directly in the low-carbon economy or in its supply chain, making it a bigger sector than aerospace. Those jobs exist in the here and now.

[Catherine West]

rose—

[Claire Perry]

I am going to take an intervention from the hon. Member for Ceredigion (Ben Lake), who has not spoken yet.

[Claire Perry]

Indeed I do, and I am proud to have secured one of the largest increases in innovation research and development spending in the clean energy space. Of course, the ECO scheme, which we have recently pivoted to focus on fuel poverty in its entirety, includes an increase in the amount spent on innovation.

[Catherine West]

Will the Minister reassure us that when her officers are looking at the responses to the consultation, they will take into account the fact that for small schemes, such as the one that is putting solar panels on schools in my constituency, the overheads tend to be greater?

[Claire Perry]

That is a valuable point, and the hon. Lady is right to make it.

The consultation is closing in a few hours’ time. I know that it has been welcomed, including by the industry, which sees it as a bridge to a renewable, subsidy-free future. The comments that have been made today will be valuable in ensuring the details of the scheme are acceptable.

--- Later in debate ---

[Claire Perry]

Sadly, in all honesty, probably not. We have been clearly signalling the closing of the FIT scheme for several years now, and the response from the industry has been, “We understand that. We understand that some schemes may be on hold, but we welcome the smart export guarantee, because our main ask was to ensure that the energy that was being generated had some value.”

My hon. Friend the Member for Eddisbury asked me another question about an issue that I was not fully aware of—namely, the concerns about testing the smart metering equipment technical specification 2 programme to ensure it interacts effectively with solar generation. I have instructed my officials to ensure that that testing is actioned, because that is an important point.

[Catherine West]

Will the Minister give a brief account of what is happening with Government buildings? They are clearly low-hanging fruit, as it were; there should be more and more solar installations on Government buildings.

[Claire Perry]

I am sure that the hon. Lady will have read the clean growth strategy from cover to cover, and will have seen in there that we have set out ambitious targets for the central Government estate and the wider estate. As we have so many former representatives of local authorities here, I encourage all Members to look at the Salix scheme, which allows local authorities to green up their own activities and rely on an interest-free revolving loan. It has been a great success story, and one that we must do a lot more on.

I will mention another issue—briefly, as I only have two minutes. A question was asked about encouraging housing associations and others to be involved, and I have been encouraging housing associations and local authorities to think about issuing green financial instruments. There is a huge appetite for green bonds, either individually or collectively, and using that funding for some of the excellent energy efficiency work that is available.