Feed-in Tariffs

Baroness Winterton of Doncaster Excerpts

Thursday 9th February 2012 Commons Chamber

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I am sorry that the Secretary of State cannot be here today. He is in Cumbria opening the world’s largest industrial offshore wind farm—another big step forward in the deployment of renewables under this coalition Government.

The Government have today announced ambitious plans to ensure the future of the feed-in tariffs scheme and make it more predictable. The reforms will lead to a bigger scheme, providing better value. The feed-in tariffs scheme provides a subsidy, paid for by all consumers through their energy bills, to enable small-scale renewable and low-carbon technologies to compete against higher-carbon forms of electricity generation. The unprecedented surge in solar photovoltaic installations in the latter part of last year, owing to a 45% reduction in estimated installation costs since 2009, has placed a huge strain on the feed-in tariffs budget. That threatened the Government’s ability to roll out small-scale low-carbon technologies over the next few years in the numbers that we had wanted. We therefore acted as swiftly as possible to respond to the threat, through the changes we are now making to the tariffs for solar PV. Today is a turning point for the feed-in tariffs scheme.

[Ms Rosie Winterton (Doncaster Central) (Lab)]

I’ll say—downwards!

[Gregory Barker]

The right hon. Lady might care to listen, because she clearly knows nothing about it. Rather than cackling, perhaps she will just listen for a change. The Opposition asked for a statement and I am giving it.

We have looked at the feed-in tariffs budget and made the most of the flexibility available under the levy control framework to ensure that we can keep the scheme going, but we want to do much more. The reforms I am announcing today are designed to make that budget go as far as possible to maximise the number of people able to benefit from feed-in tariffs. With the new reform package, we aim to give plenty of TLC—transparency, longevity and certainty, which were absent from the old scheme that we inherited from Labour. The reforms will provide greater confidence to consumers and industry investing in exciting renewable technologies, such as solar power, anaerobic digestion, micro-CHP, and wind and hydro power.

Instead of a scheme for the few, the new, improved scheme will deliver for far more people. Our plans will see almost two and a half times more installations than was planned by the Labour Administration, and that is just by 2015. That is good news for consumers and good news for the sustainable growth of the industry. We are proposing a more predictable and transparent scheme, as the costs of technologies fall. That will ensure a long-term, predictable rate of return, which will closely track changes in prices and deployment. Make no mistake: this will be a challenging package. The tariff degression mechanism that we will propose will not allow for fat profits or excessive rents, but it will show a serious ambition. Under our new plans, we believe that by 2020 we could see up to 20 GW of solar installed in the UK. That is a huge increase in our ambition for decentralised energy. This coalition wants to see a bright and vibrant future for small-scale renewables in the UK, in which each of the technologies is able to reach its potential and get to a point where it can stand on its own two feet without the need for subsidy, sooner rather than later.

In opposition, we promised a decentralised energy revolution, bringing power to the people. Today we take a huge stride forward to making that dream a reality.