Ed Davey MP writes… Solar power for the many, not the few

Some things in politics are symbolic. For dyed-in-the-wool environmentalists like the Liberal Democrats, solar power is one of these things – indisputably clean, green and cutting edge technology. The sort of thing Liberal Democrats in a government that aims to be the greenest ever should be unequivocally behind.

Our commitment to the environment was why I joined the party in the first place.

So I understand why many of you were confused and disappointed when the Government appeared to scale back the Feed in Tariffs that allow people to install solar panels in their homes and businesses, not least when our decision was challenged in the courts.

Make no mistake, I want solar power to be as widely available as possible.

The fact is the Feed in Tariffs scheme, as we inherited it, helped too few people. With the cost of solar panel installation dropping dramatically in recent years, having an unnecessarily high tariff means fewer people can take advantage of it.

By lowering the tariff we can extend it to more people – making clean, green, renewable energy available to the many not the few.

That’s why, in my first decision as Energy and Climate Change Secretary, I am announcing a consultation to look at exactly how we reform the tariff to make sure as many people as possible take advantage of it.

I want more solar panels installed and more carbon emissions saved than under the old scheme. I want the returns you get from solar power to be predictable, sustainable and attractive. I want to be able to give guarantees to those of you who install solar panels for your communities to use. And I want to give a real boost to other forms of renewable energy like micro-combined heat and power, which allows people produce clean, green electricity in their homes.

I am proud of the big, ambitious green measures my predecessor Chris Huhne and the Liberal Democrats in the Coalition Government have undertaken:

  • The Green Deal which will lead an energy efficiency revolution in our homes
  • The Green Investment Bank to kickstart green businesses and green jobs
  • The most ambitious climate change targets a country has ever set
  • And real progress at Cancun to get international agreement on climate change

I don’t believe that fighting climate change and rebuilding our economy are mutually exclusive. I believe green jobs are the key to our recovery.

And I don’t believe going green means hitting people in the pocket. Energy efficiency, our reforms of the energy market and giving consumers more information will help bring down bills.

I am determined that this will be the greenest government ever. I’m up for that challenge and I’m sure all Liberal Democrats feel the same.

* Edward Davey is Secretary of State for Energy and Climate Change, and MP for Kingston and Surbiton

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28 Comments

  • What about the fact that the vast majority of power used in this country is for industry, not in our homes and they already have the best tariffs, etc.

    Whilst I think solar power is a good thing is this really the best time to pass the high costs of it onto customers. As energy use doesn’t go up that much as you use more, increases in energy pricing hit the poorest hardest.

  • Sarah whitebread 9th Feb '12 - 4:53pm

    Is Ed mixing up Cancun and Durban here?

  • Penny Vingoe 9th Feb '12 - 5:06pm

    Thank goodness the Conservative ‘back benchers’ have recognised just how inappropriate are the subsidies being handed out to individuals who choose to make big profits by putting inefficient wind turbines onto their land. Imagine if you gave the £2 million that has already gone to just one local wind farm ownerin Wales, to all the individuals in the locality in order that they put solar on their roofs? Solar works even when the wind isn’t blowing….. and individuals would be helping themselves by reducing their own energy bills and doing their bit for the so called ‘Big Society’

  • Paul Pettinger 9th Feb '12 - 5:17pm

    Dear Ed, please stop the massive indirect subsidy of nuclear power through fixing the price at which energy is sold. The coalition agreement said nuclear power would not be subsidized, but the spirit of the agreement is being subverted.

    Nuclear power has a very large carbon foot print due to the need to mine and process uranium (this just appears on someone else’s carbon balance sheet), and when you factor in all the long term costs is a very expensive form of energy production. If we are going to subsidize energy production in this way then there are renewable options that are much more deserving, while we are not going to have the problem that we thought we were in terms of serving our future energy commitments if ‘fracking’ is a realistic option, which it is increasingly appearing to be.

    Your civil servants are very well meaning, but I fear may not give you the balanced overview that you should be provided with regarding nuclear energy.

    I am very pleased that you have made the cabinet.

  • Graham Tapper 9th Feb '12 - 5:21pm

    Sorry Ed but if you really wanted to encourage the take-up of micro-generation then reducing the FITS tariff is exactly the wrong thing to do. Anything that will radically extend the payback time for the investment in micro-generation solutions will discourage that investment, not encourage it. Anyway, if you were really committed to reducing Britain’s dependency upon fossil fuels for power generation then you would be introducing measures to change the Building Regulations to make it a requirement that all new property developments have micro-generation capabilities incorporated as built.

  • paul zukowskyj 9th Feb '12 - 5:24pm

    Not quite sure how lowering the tariff people get is supposed to expand solar generation in private homes? Is it just me, or does the drop in tariff mean the total costs of installing solar go up meaning it is less attractive? It seems to me the effect will be less solar, not more. Not green, not particularly liberal and certainly not encouraging me to support the government’s stance. Ed, am a bit disappointed you’ve put your name to this….

  • Paul Westlake 9th Feb '12 - 5:55pm

    Encouraging new research showing dramatic fall in solar costs http://gu.com/p/35aqz/tf Report available on DECC website http://bit.ly/qK9Cvg

  • Peter Clark 9th Feb '12 - 5:59pm

    It seems to me that this is mainly an attempt to reduce the cost to Government by making Solar Panels less attractive. If the tarrif was to follow the reduction in cost and increase in efficiency we would see a 25% rather than a 50% reduction.

  • Ed – congrats on getting job but please take more care with your arguments. We are adults. You are implying a fixed pot of money available for feed-in tariffs within the green budget, thus when divvied up more people can share in that pot, The weakness of this argument is that the lower tariff will persuade fewer people to install solar power, with the knock-on of lost manufacturing and installation jobs, It ignores the lost participation of individuals in increased green power consciousness. The feed-in tariffs seemed to be pinching because they were succeeding, and the attempt to reduce them was a precipitate knee-jerk reaction rather than reinforcing a public relations triumph by increasing the pot available. This could easily be achieved by reining in the subsidies given to overseas power generation companies for the installation of on-shore wind farms. Not only are these excessively generous but are already producing very strong local reactions both with their direct adverse environmental impacts and the press reports of massive payments to said foreign owner to turn them off – a PR disaster still unfolding.
    People will be more easily persuaded to accept increasing energy costs if they are encouraged to take personal action to ameleriorate them.

  • Simon McGrath 9th Feb '12 - 9:10pm

    Amazing how many otherwise sensible Lib Dems want to increase fuel poverty by putting up power prices. Solar is a grossly inefficient way of generating electricity and the more solar there is the more prices have to rise to subsidise it.

  • Kathy Smyth 9th Feb '12 - 11:50pm

    With reference to Robin Hill’s comment on onshore wind.
    You get the same level of subsidy whether you are a commercial foreign operator, a commercial uk operator or a community co-operative. but I wonder whether Robin would like to set out his understanding of the level of subsidy currently received by large scale onshore wind which he deems to be ‘excessive’ relative to other large scale renewable installations

  • Yes the sudden premature reduction in feed in tariff was a confidence sapping blunder. But a properly planned gradual reduction in tariff, as capital costs come down, is only fair to the ordinary consumer.

    Ordinary electricity consumers more than recoup the tiny cost of feed in tariffs by the prevention of the runaway fossil fuel price rises that would occur, if renewables were not taking some of the load.

    Solar is not much good at night, or for most of the day in the winter when the sun is low. We need a mix of renewables and we need to provide for occasions when neither sun or wind is available.

    In a nuclear power station, the amount fuel used per unit of energy generated is very small. Hence nuclear power has a very low carbon footprint, even if carbon fuels are used in mining. The energy price floor does not subsidise nuclear generation, it penalises high carbon producers.

    Certainly we need to build to higher standards and improve existing buildings, but not all locations are suitable for renewables microgeneration. Over-shadowing and wind shelter can make solar PV and wind turbines unsuitable. Domestic CHP boilers use fossil fuel and heat pumps use electricity, most of which is currently generated from fossil fuel.

    Continuing to rely on fossil fuels and not encouraging investment in alternatives would heit the poorest hardest. As fossil fuel becomes more scarce, the rich will make sure they get more than their fair share by pricing out the local poor. On a world wide scale it is the poor who suffer most when climate change brings flood and famine.

  • Sorry! Above shoud read “Carbon price floor” and “hit the poor hardest.”

  • Kathy is right to pick me up for singling out on-shore windfarm subsidy rather than citing both on- and off-shore wind. The points I was trying to make related to the effects of policy (especially the allocation of subsidy) upon the wider public consciousness. If our carbon footprint is to be propely managed it requires the population at large to become behaviourly involved, not merely have use rationed on price with all that results in terms of fuel poverty.
    The tapering of micro-generation subsidies with reasonable notice, and to reflect demonstrable manufacturing cost trends, is a reasonable proposition. However, the manner in which the individual household subsidy was suddenly halved just as it was beginning to gain traction, inviting a successful court challenge, needs to be regarded against a background of reports of power supply profit explosion and multi-million wind switch-off payments. Claims of wishing to widen direct public involvement in green energy seem at the least disingenuous in such a context.
    With regard to large-scale wind there is already in Wales a widely expressed feeling that, by reserving planning powers, Westminster reveals its lack of regard for the Welsh environment, ignoring the risk that that implies for tourism (the principal post-industrial economic and employment hope), regardless of local feelings . Micro-generation at least has the advantage of using the existing power distribution network for collection also; large-scale wind is a distributed generation medium which requires a whole new collection network. Even the product of off-shore generation must be brought on-shore, and the battle is only just being joined over the consequential development of sub-stations and pylon chains in some of the most environmentally sensitive parts of Wales and the borders.
    In determining this area of policy, which has such long gestation, the dangers of unintended consequence are already being shown to be at their greatest.

  • Andrew Gibbs 10th Feb '12 - 11:01am

    The fall in prices for solar installations would make it reasonable to reduce the FIT rates to match, but trying to dress up the debacle at the end of last year as ‘making green energy available to the many not the few’ is a complete nonsense and serves only to make any other of your statements in this area hard to believe.
    If you want to be green then you need to do a lot more that put a few solar panels on houses: new homes must be built to real efficiency standards, not the half measures that allow construction companies to save a few quid. Make improvements in house insulation mandatory in the rental sector. Invest in light rail and bus schemes for those commuting to work, not poor value and environmentally damaging high speed rail for those who should be making use of teleconferencing. Implement more congestion charging/road pricing. Nuclear power is a long way from perfect, but needs to be embraced as the only meaningful medium term solution. Etc. etc. Maybe you will have to fight vested interests in big business, as well as apathy from the general population, but these are the things that I would be looking for from a ‘greenest government ever’.

  • Yes, I think most people have picked up that this article makes no sense and I am disappointed in Ed (who I have a lot of respect for) starting in this way. It bemused me when I got it as an email as well.

    Can I suggest the correct article would have said:

    1. We inherited an unaffordable scheme from the previous government.

    2. Unfortunately, we then made things worse by sitting on our hands for over a year, then reducing the subsidies without proper warning and before the consultation period expired leading to inevitable challenges in the courts and disrupting a lot of small businesses.

    3. Therefore, as my first step, I am going to withdraw the Govt.’s appeal, giving some certainty to small businesses and announce a proper consultation with the aim that we deal with some of the tariff issues to make sure that this isn’t just for rich homeowners who are going to stay put for 10 years.

    I think that would have got people back on side on this issue whereas the article above just annoys people who can see the obvious contradictions.

  • Paul E G Cope 10th Feb '12 - 11:05am

    All gas CH users should move towards gas generators for their electricity. Only in this way can the vast amounts of heat wasted in cooling towers be redirected usefully to domestic heating so saving 18% of total UK energy.

    This still uses fossil fuel, yes, but in a far more efficient way. Power stationa are only 40% efficient. Domestic generation is nearly 100% efficient because the “waste heat” is not wasted.

    By the way, solar power is specially useful because it generates power when all the supermarket gondolas are
    going flat out to keep cool. – Paul E G Cope

  • The only south facing roof I have is on the garage which is approx. 2 metres by 3 metres. It would have been worth covering in solar panels with the old tariff but not with the new tariff. The new tariff seems to only benefit people with large south facing roofs i.e. more beneficial to the better off.

  • Ed

    If you are serious about solar power for the many not the few then I hope you will be able to look at two things:
    – muti – property installations such as for social housing schemes – this can make a real difference to the electricity bills for some of the poorest people but at present councils and housing associations are being deterred from doing this because the planned rate of return is just too low
    – community tariffs – panels on public buildings like school roofs and village halls run on a not for profit basis also need to be looked at again as again there are fears that the current rate of return will be too low to kick start the scale of investment needed.

    regards

    Rob Banks
    LGA Lib Dem Group

  • Most of us will agree that harnessing more solar energy is a Good Thing. The problem is that, with payback times of 12 to 20 years even with the present Feed In Tariff, domestic installations are financialy unsound. Only the social benefit justies the subsidy.. Why then is the subsidy paid for by energy consumers who do not benefit ffinancilally from these installations? Because installers purchase less power from their suppliers they pay less, or perhaps none, of the subsidy included in suppliers’ tariffs. If there are to be subsidoes they should come from the whole population, not primarily from households which may have good reason not to install domestic systems.

  • Roland Frankel 12th Feb '12 - 5:06pm

    One of the biggest errors which the previous government made was to restrict the availability of FIT schemes to those installed by “registered” installers. Succesive governments opt for this form of restrictive practice and in doing so, fail to understand how this skews the natural laws of supply and demand.
    Indeed, the cost of the hardware (mostly imported sadly) has reduced dramatically, but niether the householders or the government have been able to benefit due the the greedy (MICS registered) installers who are making a fortune on each installation. It is no wonder that they have the resources the take the coalition to the high court!
    There is no reason why small microgeneration solar schemes cannot be installed by any competent electrician or DIYer, with connection to the grid subject to a simple inspection by the electricity company as is the case with any new building. Do not listen to the installers when they say how hazardous and expensive it is to instal panels as they have a vested interest.
    To sum up, the best way forward and the way which will make solar energy available for many more householders is to deregulate.
    Yet another benefit is that it will greatly facilitate the option of taking the panels and inverter with you if you move house, in that way making your investment mobile as it might normally be in a bank.

  • This speech by Davey makes absolutely no sense.

    By gutting the FITs for solar the way they have – first for 50 kW+ systems and then for smaller systems – the ConDems have effectively sabotaged the UK solar industry at the cost of thousands of jobs and all to save pennies on utility bills if they had simply honoured FITs payments as agreed. The ConDems have created uncertainty and thereby destroyed investment, jobs and CO2 mitigation efforts.

    Next we are told that The Green Deal “will lead an energy efficiency revolution in our homes”, but DECC’s own research suggests that “the number of lofts being lagged is set to plummet by 93 per cent.” as a result – http://www.businessgreen.com/bg/news/2137359/green-deal-suffers-setback-loft-insulation-lagging-plummets

    This speech by Davey offers some fine rhetoric and rousing promises, but all evidence suggests that it’s little but hot air when compared to the *reality* of what DECC and the ConDems are actually doing. And doesn’t that describe the LibDem election manifesto when compared to the reality of what they have supported in this toxic coalition?

    As Davey repeats the mantra of “the greenest government ever”, EDF are right now bulldozing fields and forests at a Site of Special Scientific Interest for a new nuke in Somerset that doesn’t even have planning permission. Excuse me for not believing what he says.

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