Oral Question: Solar Panels & Energy Poverty

- Thursday, 5th February 2015

 

Solar

Mr Graham Allen (Nottingham North) (Lab): What assessment he has made of the effect of recent changes to the incentive scheme for installing solar power panels on businesses that install those panels.

 

The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd): Solar PV has been a major success story, with the most recent deployment figures showing a total of 5 GW of capacity across the UK, 99% of which has been put in place under this Government. The solar strategy, published last spring, set out a range of actions that will allow more businesses to enjoy reduced energy bills through installing solar PV. The changes we have made, financial and non-financial, for solar PV will make it an affordable part of our low-carbon energy mix, and we anticipate that splitting the feed-in tariff will promote rooftop solar, particularly at industrial premises.

 

Mr Allen: Unfortunately, I do not have many small businesses in my constituency, so it is a tragedy when I lose one; losing MG Renewables, which had invested in a fleet of vehicles, was a matter of great regret. Will the Minister reassure the House that we will have a steady and clear set of incentives, rather than this constant changing, which makes it particularly difficult for small businesses to plan and maintain their viability? Will she talk to the Treasury and the Department for Business, Innovation and Skills to ensure that?

 

Amber Rudd: Small businesses are essential to economic growth, and we are determined to support them. I understand the hon. Gentleman’s point, which is about the support for solar through our feed-in tariffs. Owing to the reducing capital costs of solar, we have reduced the support. It is essential that we strike the right balance between using taxpayers’ money and supporting businesses, but I appreciate his point and will bear it in mind.

 

Mr Peter Lilley (Hitchin and Harpenden) (Con): Given that we are constantly told that the reducing costs of solar panels will soon render them competitive with conventional electricity, why do we not abolish subsidies completely? Or do Ministers not believe their own projections?

 

Amber Rudd: My right hon. Friend is entirely right. The reduction in cost and the success of solar PV mean that, according to the industry itself, it will become subsidy free, we hope, by the end of the decade. That is because of investment under this Government. It will be something to celebrate, and something that the taxpayer, as well as everyone in the Government, will appreciate.

 

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Mr Jim Cunningham (Coventry South) (Lab): The Children’s Society estimates that in Coventry South 3,200 children are living in families trapped in energy debt. It has been calling on the Government to increase support for those families by changing the Department of Energy and Climate Change strategy and policy statement to include families with children as a vulnerable group. That will ensure that Ofgem and energy companies do their part to give families the support they need when they fall behind with their energy bills. Will the Minister give that some consideration?

 

Mr Davey: That is a very significant issue. When we were working on the fuel poverty strategy, using the analysis of Professor John Hills—the new method of looking at fuel poverty—we found that it uncovered a number of things that were not so obvious in the old method, such as people in off-gas grid homes being among the most fuel poor, and far more families being in fuel poverty as a proportion of the overall total. That is why the warm home discount is so important; it targets money on not just pensioners but low-income families. The fuel poverty strategy will now address that matter, too.

 

Mr Peter Lilley (Hitchin and Harpenden) (Con): Earlier, the Under-Secretary of State said that, by 2020, we will see the availability of more advanced lower-cost solar panel technology, which will not require subsidy. Why not wait until 2020, rather than encouraging people to install high-cost, immature versions of that technology that will require us to commit to paying out subsidies right through to 2030?

 

Mr Davey: We have been cutting solar subsidies throughout this Parliament—indeed we have come under great attack for so doing, including from the Opposition. We are consulting on closing the renewables obligation system to the solar industry, and again that has led to a lot of criticism. However, I do not apologise for taking those measures, because it is important that we get best value for money for the taxpayer while encouraging the very important solar industry.

 

 

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