The Rt Hon Edward Davey MP

Secretary of State for Energy and Climate Change

Department of Energy and Climate Change

3 Whitehall Place

London SW1A 2AW

 

Date: 11th September 2014

 

Dear Ed,

 

I’m writing with regard to your policies on solar power, to urge you to ensure that solar PV at all scales makes a significant contribution to Britain’s future zero carbon energy mix.

 

We will only be able to decarbonise our power supply effectively and create a stable supply of renewable electricity if we encourage a range of technologies to develop and scale up their deployment - and that includes solar.

 

Solar is the UK’s most popular low carbon energy source. As your own opinion polls show, solar power is supported by 82% of adults. Solar has the potential to thrive across the UK, commercially and as community energy, both through community-led and shared ownership schemes.  

 

In my Brighton Pavilion constituency, an increasing number of schools, community groups, businesses and individuals are already going solar – but the potential is even greater still.

 

As shown by the guidance on how to optimise biodiversity on solar farms developed with leading conservation groups, large scale solar can be very nature-friendly. Good solar farms do not displace food production as they are situated on non-agricultural or low-grade agricultural land. Farmers can continue to graze sheep or farm free-range poultry in between the rows of panels.

 

Since 2010 large-scale solar has successfully navigated a record 65% reduction in support. Solar has the potential to be so cheap by the end of the decade that it will be able to compete subsidy-free – but the British SMEs driving these cost reductions will only get there if the industry is given stable policy support in the interim.

 

I am therefore deeply concerned about your Department’s proposal to close the Renewables Obligation (RO) early for all large-scale solar PV in April 2015 and the potentially significant challenges for solar under Contracts for Difference (CfDs).  These could seriously curtail the UK’s solar PV sector when we need the very opposite. The Solar Strategy rightly highlights the potential for the mid/large roof-top solar market in the UK. However, the FiTs are clearly failing to deliver significant large roof-top deployment. DECC's own Impact Assessment shows your proposed changes to the FITs will only deliver at best a handful more large roof-top schemes per year. More decisive action is clearly needed to deliver on your own Solar Strategy.  DECC policy should be designed to drive the deployment of well-sited solar farms as well as large-scale roof-top solar.

 

Solar currently accounts for just 3.5% of the Renewables Obligation budget. The argument that solar has to be excluded in order to protect the budget doesn’t stand up. Energy Minister Matthew Hancock’s answer to my Parliamentary Question on energy prices last month shows solar is forecasted to get a tiny fraction of the RO and CfD budgets between now and 2040. Under CfDs, solar is forecasted to get less than £2billion whereas nuclear could get up to £47billion.

 

I am keen to hear how you can justify allocating such a relatively small amount of resources to solar power. I am also keen to understand what steps DECC will take to safeguard British solar SMEs who now face serious curtailment of the solar farm market, alongside insufficient action to unlock the large roof-top markets.

 

In addition, I would be grateful if you could please confirm my understanding of the savings resulting from the closure of the RO to solar. Is the assumed saving from RO closure over the “do nothing” option in the DECC impact assessment £70m per annum? Does this equate to less than 1% of the total LCF budget in 2020 and just over 1.4% of the annual budget in 2016?  Is the reduction to household electricity bills 75 pence per annum, equivalent to less than 1.5 pence per week?  If these figures are inaccurate, please let me know the correct ones.

 

I urge you to act quickly to provide clear policy and resource certainty for UK solar. This is a shining example of the green economy that currently provides 16,000 jobs across the country. Undermining British solar power does not make economic sense, does not make environmental sense and does not make political sense.

 

Thank you in advance for your reply and I look forward to hearing from you.

 

Yours sincerely,

 

 

Caroline Lucas, MP, Brighton Pavilion