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What assessment his Department has made of the potential merits of providing remuneration at a fair market rate for self-generators of solar power putting surplus energy on the networks.
The Government and my Department remain enthusiastic about the role of solar generation and its role in decarbonisng power in the UK. However, as the market matures and installation is now possible without Government subsidy, we believe that it is the right time to close the feed-in tariff scheme. We already have 13 GW of solar capacity supported under current schemes. Indeed, at one point in May this year, solar provided more power generation than any other source.
Rooftop solar is set to lose support from the feed-in tariff and the export tariff, which help to pay for clean power to the grid. Does my right hon. Friend agree that householders should expect some form of payment rather than simply subsidising large energy companies?
My hon. Friend will know that the FIT scheme has been a huge success, supporting over 800,000 installations nationally, including almost 3,000 in his constituency. It has cost consumers over £4.5 billion to date and is scheduled to cost more than £2 billion a year for at least the next decade. It is therefore right that we consider a new scheme, as the cost has fallen. However, I do completely agree that solar power should not be provided to the grid for free, and that is why I will shortly be announcing the next steps for small-scale renewables.
I call Daniel Kawczynski. He is not here. Mr Richard Graham. Not here. I hope that neither of the Members concerned is indisposed. It is most unlike them not to be present, but they were informed of the grouping, I am sure, by the Government. [Interruption.] Okay—thank you. Well, never mind—they are not here and we cannot take them, but other Members are here, and we are delighted to see it. Mr David Hanson.
Thank you, Mr Speaker.
The number of installations under solar has fallen by 90% in the past two years. Taking up the point made by Kevin Hollinrake, what steps is the Minister taking to ensure, first, that providers are still in place next year to continue to grow this sector; and secondly, that customers are not subsidising large energy companies?
The good news, as I mentioned, is that we have moved from a position of heavy—very expensive—subsidy for many of these small-scale schemes. Because the cost of solar installations has dropped by more than two thirds, we think it is right to change that. I am sure the right hon. Gentleman will be pleased to welcome the news that a string of private sector subsidy-free solar funds is set to open this year, particularly with business premises now taking advantage of the benefits that solar can provide in balancing their own systems. We are going through that transition with the expectation that we will see more solar deployed next year than we have previously.
My hon. Friend is a doughty campaigner for all forms of renewable energy in Kettering, and he is right. There are many ways to bring forward better low-carbon generation—but, equally, better energy efficiency measures—in new builds. We have set out plans under the clean growth strategy to try to achieve those ends, and I am looking forward to delivering them.
I invite the Minister to be far more ambitious for rooftop solar as PV prices continue to fall and as batteries to store surplus solar power become ever more competitively priced. The opportunity for many homes to become their own power station has arrived. Should we not therefore be planning and encouraging such an exciting outcome?
I pay tribute to the right hon. Gentleman, whose activities in coalition contributed to a boom in some of the cheapest forms of renewable energy, including offshore wind. We are now able to generate over 30% of our energy supply from renewables, which is much cheaper than putting it on individual rooftops. He raises a really important point. As our energy system migrates to a much more decentralised, much more intelligent system—helped, I might add, by the roll-out of smart meters—there is real value in that micro-generation, and that is what I am hoping to support when I bring proposals to the House shortly.
It is very heartwarming to see that Richard Graham has now beetled into the Chamber. I am sure that the House and an expectant nation wish to hear him.
I am very grateful, Mr Speaker.
I think my right hon. Friend the Minister, who has done a lot to support renewable energy, may have covered my key point. However, does she agree that there are hundreds of churches, schools, local authorities and co-operative groups around the country, not least in my own constituency of Gloucester, that will benefit hugely from her announcement of what will replace the current system, and that it would be totally wrong for energy companies to benefit from free energy were there not to be a replacement system?
I hope my hon. Friend caught my point that I agree it would be wrong to have power provided to the grid for free. In his constituency, there are now more than 1,300 feed-in tariff installations, and he should be proud of that. He is right; there are many such organisations. I was lucky to meet a group of people from all different faiths who were really committed to a zero-carbon future in many places of worship. That is happening right across the country. There is value in that, and we want to see it continue.
I encourage the hon. Lady to move away from defining success as the amount of subsidy that renewable energy receives. In fact, thanks to incredible policy work and innovation by the suppliers, Scotland, like other areas, has benefited from a rapid decline in energy costs. We will continue to invest in clean growth—more than £2.5 billion over the course of this Parliament—and we will all benefit from those jobs and the renewable energy that those installations provide.
Before I call the shadow Minister, I know the House will want to join me in welcoming Speaker Elisabetta Casellati of the Italian Senate—a distinguished parliamentarian and the first female holder of that office. Madam Speaker, we wish you and your colleagues well on this visit and in all the important work that you do.
The Government say in their clean growth plan—indeed, the Minister has said it this morning—that they want to see more people investing in solar without Government support. I cannot think of a better way to discourage people who might be thinking of investing in solar than telling them that they will be expected to give away to the national grid half the electricity they generate from their investment. When we talk about the export tariff, we are not talking about a subsidy; we are talking about a payment for goods supplied. The Minister has elided the feed-in tariff and the export tariff. Can she just accept that she has messed things up on this occasion, call off talk of removing the export tariff and get on with using that tariff to support future subsidy-free solar investment?
I am invited to say buongiorno to our visitor in the Gallery.
The hon. Gentleman and I are, as in many cases, in violent agreement. We signalled clearly several years ago the closure of this scheme. It is a very expensive scheme; it was going to cost £2 billion a year for decades to come to bring forward microgeneration. We now have much more energy-efficient and cost-effective ways of generating renewables. As I said, I absolutely agree that people who have gone through the installation process should not be captive takers, should someone want to buy their energy. I look forward to announcing further deliberations on this shortly.