The government is proposing to cut the subsidy for solar energy by a shocking 87% in one go. This is an irresponsible decision to make at a time when reducing carbon emissions in order to address climate change could not be more pressing. The solar industry supports 35,000 jobs in the UK, up to 20,000 of which would be threatened by this proposed cut. I have written to the Secretary of State for Energy and Climate Change asking her to think again about cutting the support for solar energy. Please see the text of my letter below:
Dear Ms Rudd,
CONSULTATION ON THE SOLAR FEED IN TARIFF (FIT)
I am writing in response to the government’s consultation on the feed in tariff scheme, and specifically the proposal to cut the feed in tariff by up to 87%, coming after the decision in September to stop pre-accreditation. I have received a very significant level of correspondence in opposition to these proposals from my constituents, from local and national businesses and also have very strong personal concerns about these proposals.
The growth of solar energy has been a huge British success story since 2010 and installation costs have reduced by over 70%. The Feed In Tariff has underpinned this success, providing 700,000 homes with low-cost, carbon free electricity and helping to create 35,000 jobs, almost all of them in small and medium enterprises. There is little disagreement that the Feed In Tariff can come down as the cost of installing solar continue to fall, but I have very serious concerns about the extent and timing of the proposed reduction
My principle concerns are in relation to the following areas:
1. Impact on jobs
It is estimated that the proposed cut to the feed in tariff will result in up to 20,000 job losses nationwide. I have been contacted by D & J Roofing, a solar installation company in my constituency, which employs approximately 20 people. They are very clear that such a dramatic reduction in the feed in tariff, combined with the immediate closure of pre-accreditation will have a devastating impact on their business.
It is clear that the UK urgently needs to develop and support high skilled jobs in green technology, and I believe that the decision to cut the solar feed in tariff so dramatically is an irresponsible step in this regard. The solar industry currently adds £33 billion in GVA to the UK economy. With the loss of jobs will come the loss of capacity, expertise, and the UK’s competitive edge in solar technology.
Experts in the field agree that although there is clearly scope to reduce the Feed in Tariff as the cost of solar reduces, this should be phased in over the next five years, rather than the extremely large cliff edge cut that the consultation is proposing. In my view, the withdrawal of subsidy should be undertaken only after close discussion with the solar industry, to ensure that the timing is right and the reduction responsible.
2. Impact on decarbonisation of UK energy
The proposed reduction in the solar Feed In Tariff will deliver a very severe blow to the goal of decarbonising the UK energy supply. The government’s own estimates suggest that the reduction in the Feed In Tariff will result in almost one million fewer solar schemes being installed by 2020, accounting for around 7GW in capacity. This reduction will result in an increase in projected carbon emissions by 1.6million tonnes, at a time when reducing our carbon emissions could not be more urgent.
3. Impact on the community energy sector
I have been contacted by two community energy organisations in my constituency, Sustainable Energy 24 and Repowering London. The Feed In Tariff has played an important role in helping communities in my constituency harness natural energy resources to reduce and localise energy spend, tackle fuel poverty and generate an income to invest in the area. As Sustainable Energy 24 wrote to me:
‘It’s not just the panels that make a difference; it’s the increased level of engagement with meeting the challenge of Climate Change through local community involvement in our plans, this includes working with schools and so engaging the next generation.’
I have been so encouraged to see communities in my constituency working hard to deliver local sustainable energy projects and I am extremely worried about the impact that the proposed cut in the Feed In Tariff will have on them.
Sustainable Energy 24 and Repowering London rely on local individuals investing in community projects, and need to have certainty in order to offer a return over the period of the investment. The withdrawal of pre-accreditation has had a devastating effect on the ability of community energy companies to secure new investment. The proposal for cutting the subsidy to the community energy sector is entirely unjustifiable – it is a withdrawal of support for communities which want to do the right thing – tackle carbon emissions, reduce fuel poverty and engage local residents in taking positive action to reduce climate change.
Climate change is one of the most pressing issues that we face, and the need for action is urgent. In that context, the decision to cut the Feed In Tariff at this time is the wrong choice. Should these proposals go ahead the government would be damaging the capacity of the solar industry, and further weakening the UK’s position as a world leader in the field of climate change ahead of the vital Global Summit in Paris in December.
I urge you to listen to the thousands of people who have taken part in the consultation on the Feed In Tariff and who have objected to the removal of pre-accreditation, and to revise your proposals to protect the community energy sector and introduce a phased withdrawal of the subsidy after detailed discussion with the solar industry.
Yours sincerely,
Helen Hayes MP
Labour Member of Parliament for Dulwich and West Norwood