Feed-in Tariffs - 31st October 2011

15:33 Caroline Flint (Don Valley) (Lab)

(Urgent Question) : To ask the Secretary of State for Energy and Climate Change if he will make a statement on the Government’s proposals to reform feed-in tariffs.

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15:33 The Minister of State, Department of Energy and Climate Change (Gregory Barker)

Since the feed-in tariffs scheme started, it has been successful in encouraging people up and down the country to get involved in local, clean green energy generation. Solar photovoltaic has led the way, and more than 100,000 homes now generate their own electricity. It is a very attractive technology to install, driving forward the coalition’s ambitious, decentralised energy agenda, but let us be clear: the current returns now available on solar PV investments, funded by energy consumers through our energy bills, are unsustainable. Falling PV costs mean that returns are at least double those originally envisaged for the scheme. This does not provide value for money to consumers. If we do not act now, the entire £867 million budget for the current spending review period would be fully committed within the next few months. That would limit the number of people able to benefit from feed-in tariffs.

We are therefore consulting on new tariffs for solar PV installations. Owing to the urgency involved, we propose that the new tariffs would apply to all new installations that become eligible for FITs on or after a “reference date”, which we propose should be 12 December. We are also seeking views on other proposals, including one to strengthen the link between feed-in tariffs and energy efficiency. It cannot be right, and it is a fault of the system that we inherited, that we subsidise renewable energy generation on energy-inefficient buildings.

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Caroline Flint

Thank you, Mr Speaker, for forcing the Government to come to the Commons today. With thousands of jobs and businesses at risk, it was rather a surprise that the Government wanted only to issue a written statement. It is a shame that the Secretary of State for Energy and Climate Change could not spare the time to be here.

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Gregory Barker

It will not be a surprise that I disagree strongly with the hon. Gentleman. We are the greenest Government ever. This is the Government who have put £3 billion into a green investment bank; who have cut their emissions by 13.5%, despite Opposition Members saying that it was not possible; and who are backing green energy and have an ambitious plan for a whole range of technologies, and who are not one-club golfing.

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Dan Rogerson (North Cornwall) (LD)

I very much welcome the Minister’s comments to the hon. Member for Brighton, Pavilion (Caroline Lucas) about community schemes. May I urge him to look closely at this issue? In my constituency, Wadebridge renewable energy network—which I believe he is aware of—is looking hard at the scheme, which could have huge benefits as the money is reinvested to deliver more carbon reduction schemes across our communities.

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Lorely Burt (Solihull) (LD)

I must declare an interest. We recently had solar PV installed on our roof. The people next door saw it, and they now have it as well. I understand that the scheme has been a victim of its own success, but how confident is my hon. Friend that the change in tariffs will not cut off the growth of, and interest in, solar PV as a source of renewable energy in other households?

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