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Feed-in Tariffs

Volume 545: debated on Thursday 17 May 2012

1. What assessment he has made of the effect of changes to the feed-in tariff on the number of solar PV installations in the last 12 months. (107609)

In the last 12 months, there have been approximately 270,000 photovoltaic installations registered on the microgeneration certification scheme database, against a forecast of just 35,000 installations when the scheme was launched in 2010. Moreover, having substantially reduced the cost of each installation to electricity bill payers, the coalition is now in a position to significantly expand the ambition of the feed-in tariffs scheme.

Following the chaotic cut to the feed-in tariff, there has been a 90% fall in solar panel installations, and 6,000 jobs have gone in the industry, including more than 100 in my constituency of Kingston upon Hull North. Does not the Government’s mismanagement and this debacle mean that the industry could be strangled at birth? It also puts at risk investment in the renewables industry, which is so important to areas such as Hull.

I am surprised the hon. Lady reaches that conclusion. Since the 21p tariff came in 10 weeks ago, there have been more than 26,000 installations with 86 MW of capacity, which is equivalent to the installation rate achieved in August 2011, when the tariff was at 43p. The installation rate in the period is 1.7 times what it was in the same period last year.

Feed-in tariffs are not the only way to encourage solar PV installations. Can more be done with building regulations, especially to encourage solar to be built in to new-build properties at the start?

I am sure local authorities will look at that proposal, but the key thing is to ensure that our new, more stable and predictable regime supports the solar industry, as we believe it will. We need to ensure that the message goes out that the solar industry is back in business and on a sound footing. There will be many more solar installations compared with what happened under the solar installation regime we inherited from the Labour party.

Last week, just 900 installations took place and two thirds of businesses had empty order books, but my question is about the Government’s next round of cuts to solar, which is due on 1 July. Last night, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), tweeted:

“Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in the #solar tariffs”.

The truth is that the Government have missed the deadline legally required to provide notice to Parliament for the next round of cuts to come into force. Is not the Government’s incompetence the real reason why they are backtracking?

The right hon. Lady seems to think that we should not listen to the industry, but I do. We are considering tweaking the start date for the next tariff reduction—if we change it, it will be a tweak, not a massive change. She needs to understand that the changes that we have consulted on and are introducing will bring stability and mean that we have solar power for the many, not the few.

There will be laughs echoing outside the Chamber at the Secretary of State’s suggestion that the Government have been listening to the industry, but my question was about parliamentary procedure. Parliamentary procedure requires that due notice must be given in advance of the cuts being brought into force on 1 July. My understanding is that the Department has missed—legally—the deadline required. Will the Secretary of State therefore confirm whether the Department has missed the deadline required to give notice to Parliament? If it has, it is absolutely the truth that the Government cannot legally impose the cuts on 1 July. Why does the Secretary of State not just own up, end the uncertainty and commit to scrapping the next round of cuts on 1 July?

The right hon. Lady started by saying that the industry will be laughing, but Paul Barwell, the chief executive of the Solar Trade Association, said in The Independent on 9 May 2012:

“The current 21p subsidy can actually give a return up to 10 per cent, tax-free, index-linked, for 25 years, making it one of the most attractive investments around.”

That is what the industry is saying. The Government will abide by all the procedures required by the House and lay the regulations when required.