Draft Renewables Obligation Closure etc. (Amendment) Order 2016

Helen Hayes Excerpts

Wednesday 2nd March 2016 General Committees

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Gillan. I want to put on record my opposition to this short-sighted and unnecessary measure. The Government’s argument in making this change to the renewables obligation implies that, but for the renewables obligation, there is a level playing field in the energy market for all types of producers. That is simply not the case.

The renewables obligation is an interim measure to support the solar industry, which is still young and emerging in the UK, to establish itself in the market. At the same time, the Government continue to subsidise fossil fuel-dependent producers in multiple ways, so we do not have a level playing field and now they are taking away the one measure that was playing a role in creating a more balanced market and allowing solar to emerge as a mature sector within it.

Despite the impact assessment, I do not believe that the Government have fully explored the impacts of their measure. The solar energy industry is dominated by small businesses. The impact assessment estimates that between 8,700 and 4,500 full-time-equivalent jobs will no longer be supported in the solar industry, but the assessment says that data are poor and that there is a great deal of uncertainty about the figures. Those are big job losses and there is no indication in the assessment that the Government have talked in any detail to small businesses in the solar industry, who will be directly affected, about the impact that the loss of the renewables obligation will have on them.

I met recently with a small-scale solar installation company in my constituency. The proprietor told me that since the announcement the bottom has dropped out of the solar market part of his business. He does a number of other things—he installs windows and so forth—so that did not directly translate into job losses for his business, but he said that interest from domestic consumers in installing solar panels had simply dried up. That has the effect of stopping individual households who want to do the right thing and do their bit towards combating climate change from doing so.

The installer I spoke to was mystified by the Government’s approach. He said that solar panel installation had been growing year on year as a component of his business and that, because prices from his suppliers were falling, it would not have been too long before that part of his business would have been profitable without subsidy. He therefore did not understand why, as my hon. Friend the Member for Southampton, Test said, the Government are leaping from a glide to a cliff-edge and, as the installer put it, the rug was simply being whipped out from underneath the sector.

We have no more pressing challenge than climate change and central to addressing that is a fundamental shift in how we produce energy in this country. This measure damages the progress made towards a shift to renewables. It is short-sighted, bad for business and bad for the environment. I oppose it wholeheartedly.