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Renewable Energy: Solar

Volume 765: debated on Wednesday 14 October 2015

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the recent collapse of Mark Group, a solar energy company, in the light of their decision to reduce the subsidy on domestic rooftop solar installations.

My Lords, we are currently consulting on revisions to the feed-in tariff for solar. The consultation ends next week on 23 October. I encourage anybody with evidence to submit into that consultation. Of course, any job losses resulting from the Mark Group going into administration are regrettable, as indeed are all job losses. I strongly sympathise with those affected.

I thank the Minister for his reply and declare an interest. This year I finally persuaded my local primary school, where I am a governor, to utilise a large area of flat roof to install solar panels; with the current feed-in tariff, the payback time for investment is about seven years—with, of course, a significant saving in the electric bill. Does the Minister appreciate that the proposed massive reduction in the feed-in tariff will cause many organisations and residential home owners not to install solar panels, with resulting job losses and company closures in an industry that is vital to our renewable energy programme? Why did he not consider a phased reduction of the feed-in tariff, as the industry suggested, which would have given solar companies time to adjust?

My Lords, I repeat that the consultation is still very much open. It is true that social housing and community projects—the noble Lord referred to a school—look to feed-in tariffs as a reliable source of revenue. That is why the review specifically seeks views on this. I encourage the noble Lord to feed in to that review and to others.

My Lords, is it not worth explaining that there has to be a limit to the amount that the taxpayer and the consumer is prepared to put in to subsidise these important renewable industries? Would it not be the best advice to future investors and firms in this area to seek to develop their technologies without subsidy, as is happening in other parts of the world?

My Lords, keeping bills down for hard-working families obviously is a vital part of the Government’s policy—and it very much remains so. It is true that the costs of solar and of other renewables are falling significantly. Solar is on the fastest trajectory downwards. We are very keen to reduce the cost of solar panels by, for example, supporting lifting the ban on minimum price restrictions on the import of solar panels from China into the EU, as we are doing.

Is the reversal of the incentives for long-term investment in the renewable energy sector not in complete contradiction of the warning given by the Governor of the Bank of England that climate change is a threat to our financial resilience and long-term prosperity?

My Lords, extremely important at the moment are the climate change negotiations that are taking place, or will take place, in Paris at the end of the year, as I am sure all noble Lords will agree. The most significant thing that is raised internationally is the generosity of the contribution from the United Kingdom of £5.8 billion towards resilience and mitigation. That is what the discussion is about: taking international action. That remains extremely important.

My Lords, is the Minister aware that the Government’s boast earlier about today’s employment figures will be treated with at best ridicule and at worst the contempt that it deserves in the city of Leicester and the county of Leicestershire, where 900 hard-working workers are set to lose their jobs? This seems to be a direct result of government policy. Is the Minister not a little bit ashamed at what the Government’s policies, or policy aims, have already come to? What are the Government going to do to help?

My Lords, perhaps I may first correct the noble Lord. Most of the jobs that are lost are those of installers who are not based in Leicestershire—I know the city of Leicester very well. However, it is important to note that the Government are very alive to this fact. I am surprised that the noble Lord—in all the circumstances of the success of the market economy, though contradicted by the present leadership of the Labour Party—does not welcome the delivery of some of the best employment and unemployment figures, with unemployment coming down and employment going up. I would have thought that the noble Lord would welcome that; it is very significant.

My Lords, will my noble friend confirm that the efficiency of solar panels in this country, which is a rather cloudy country, is somewhere below 10% of nameplate capacity? Most of that happens in summer and in the day time, and seems not to happen often in the winter evenings.

My Lords, sadly it is a feature of life that we do not get as much sun as some countries. The good news on solar panels is that of course they can deliver significant advantages in Africa—which my right honourable friend Justine Greening is looking at through international development funds—and are delivering significant advantages in China and India as well.

My Lords, is the broader point not about investor confidence? Perhaps the Minister could tell us in which of the zero-carbon technologies the Government want to see investment and which of those will deliver UK jobs rather than ones potentially in France or China?

My Lords, it is refreshing to see the noble Baroness talking about British jobs and investor certainty in view of the difficulties that she must be having with her leadership in another place. I know very well that she supports new nuclear. Her leader does not.

If I have a chance I will answer it. The noble Baroness does support new nuclear; her leader does not. That is significant for investor confidence. It is also significant in terms of delivering what we need to deliver for an international agreement in Paris. It will be interesting to hear where the Labour Party is on that rather important issue.

My Lords, it rains a lot in Britain, and we have a great deal of potential water power here, which can help us—