I am pleased to inform hon. Members that yesterday the Government launched their smart export guarantee, which will ensure that all small-scale generators are paid for the power they export to the grid. Supported by Government investment, residential solar installations are now 50% cheaper than they were in 2011 and, alongside technologies such as batteries, will help consumers to export energy to the grid when it is needed, reducing their bills and making solar more accessible and affordable than ever before.
With all due respect, only this Government could dress up a 94% collapse in domestic solar installations as a success. They now plan to slap 20% VAT on solar and storage and to replace the certainty of the feed-in tariff export payments with a lick-and-a-promise scheme with no certain payment rates and no guaranteed periods. Why does the Minister not just admit that, as ever, the Tories always side with big and dirty rather than with clean and local?
The hon. Gentleman mentioned the drop in solar installations, which came about at the end of the feed-in tariff scheme. March was a record month for installations in the last two years, as we saw a rush for applications before the scheme closed. We had a question earlier about fuel poverty, and the point about the feed-in tariff is that, although it was important at the time and helped 850,000 people to use solar panels on their households, it was going to cost £30 billion, which would mean an average of £14 on every single household’s bill. We must now look into moving forward so that we can take a locally adopted position and ensure that we can generate a market.
I will try to be more positive than the hon. Member for Norwich South (Clive Lewis), but there has been concern among the industry, including AS Solar, about the proposed changes for reduced rate VAT for energy-saving materials. This presents a roadblock for many of the 60% of households that hope one day to get photovoltaic and battery storage, so will the Minister meet me urgently to discuss the matter to ensure that the solar industry gets this support from the Government?
I thank my hon. Friend for raising those points, which reflect what the hon. Member for Norwich South (Clive Lewis) mentioned in the previous question. This obviously comes on the back of a specific European Court of Justice ruling. I understand Members’ concerns and sympathise with the industry, but I reassure the House that VAT continues to be zero rated for installations on new build housing. I will happily meet my hon. Friend to discuss the opportunities for future change.
I welcome the timely launch of the smart export guarantee yesterday, but many people will be disappointed by the decision not to set a minimum floor price to protect consumers and the domestic solar market. Under the proposals, it will be left to suppliers to set tariffs. If it becomes apparent that the market is failing to sustain fair remuneration for households that export to the grid, how swiftly can we expect the Government to intervene?
The export market is clearly developing, and it is important to recognise that several suppliers are beginning to offer trial export tariffs, either in line with the wholesale price or at the same level or higher than the feed-in tariff export guarantee rate. Those suppliers include Octopus and Bulb, which have welcomed the changes. It is important that the policy can develop so that we can make sure that we see future development.
Solar power is an important part of the energy mix. What plans do the Government have to help community groups to ensure that community buildings are built to be self-sufficient by producing their own electricity and selling to the grid, and to put solar panels on the roofs of Government buildings?
There are a number of pilots on community buildings that we will be taking forward but, specifically, the smart export guarantee ensures that providers with up to 5 MW of production of solar electricity can export back to the grid. If we consider Blackfriars railway station—there is about 5 MW there—we can see the opportunity for community halls and community infrastructures to sell their energy back to the grid.