Westminster Hall debate on Solar Rooftop Installations - Mar 22

Caroline Lucas (Brighton, Pavilion) (Green)

I beg to move,

That this House has considered the matter of solar rooftop installations.

It is a pleasure to serve under your chairship, Mr Sharma. I am glad to have secured this debate about solar rooftop installations. Monday’s report from the Intergovernmental Panel on Climate Change left us in no doubt about the urgency of tackling the accelerating climate emergency, and one of the fastest, most effective ways of doing so here in the UK is to step up plans to decarbonise our housing stock. In this short debate, I want to focus on rooftop solar in particular.

There is no doubt that the number of solar rooftop installations has soared in the last decade or so, and I applaud that achievement. I am also happy to applaud this Government’s ambition to increase solar from its current capacity of around 15 GW all the way up to 50 GW by 2030 and then 70 GW by 2035. I am sure we are all united in recognising that achieving and, indeed, surpassing that target is vital.

Solar Energy UK estimates that, of the 15 GW of solar power capacity currently in place, around two thirds is on the ground, and the remainder is on residential and commercial roofs. This morning, I want to make the case for the installation of solar panels on all suitable new-build homes to be made mandatory and to explore how to overcome some of the obstacles to domestic solar.

Jim Shannon (Strangford) (DUP)

I commend the hon. Lady for raising this issue. In my constituency, we are very keen to endorse this. Does she agree that solar roof panels can enhance the value of a property and that, for large families who use lots of hot water, the savings generated and the benefit to the environment can make the up-front cost worth while?

Caroline Lucas

The hon. Member makes my point beautifully. This is a win-win policy: it is good for householders and good for the environment, and it is good to get people’s bills down too. I thank him for that intervention, with which I entirely agree.

Some 80% of the buildings that we will have in 2050 have already been built, and we must work hard to retrofit them with renewables, but the remaining 20% have still to be built, and maximising the deployment of on-site solar generation in new-build homes could be a real game changer. If we are serious about continuing and accelerating what has been achieved to date and generating a successful rooftop revolution, we should be mandating that all suitable new homes come with solar panels as standard. The Government have an opportunity to do that with the new future homes standard.

I echo the recommendation made by the right hon. Member for Kingswood (Chris Skidmore) in his net zero review that things be put in train to ensure that there are no delays to delivery by 2025. However, I would go further and argue that we do not need another consultation on whether to introduce a requirement for new homes to be built with solar, because we know that the British public are already behind the idea. A YouGov poll just a few months ago found that 80% of people across the UK would support the Government in making regulations to ensure that solar panels are the default on appropriate new-build houses. Only 9% were against that idea.

John Stevenson (Carlisle) (Con)

I congratulate the hon. Lady on securing this interesting debate. It feels a bit like groundhog day, because in September 2017 I had a Westminster Hall debate on this very subject. Had the Government followed her suggestion, we would have 1 million new homes with solar panels today. Does she agree that making this compulsory would not only lead to 150,000-plus houses per year getting solar panels but would, in time, lead to price reduction, making it cheaper, and innovation?

Caroline Lucas

I pay tribute to the hon. Member for his leadership in this area. I am continuing, I hope, the great work that he did, and I agree with him entirely that there are so many wins. It makes economic sense for people, and it also makes sense for supply chains, because if they had the certainty of knowing that this was going to be a mandatory requirement, they would be able to gear up for it.

As I say, the British public are behind this idea—no wonder when, as the hon. Member for Strangford (Jim Shannon) has said, such a policy would save homeowners money. The figures that I have are that they would save between £974 and £1,151 a year on average on their energy bills. Solar Energy UK has found that installing a residential solar system on a new build property is 10% cheaper than retrofitting one.

There are a host of MPs from different parties behind this idea, including the hon. Member for Carlisle (John Stevenson), who tabled an amendment to the Levelling-up and Regeneration Bill that would make it a requirement for every home built after 1 April 2025. I agree with his analysis of the multiple benefits of such a policy, including for the economy, jobs, consumer bills and energy security.

For the avoidance of any misunderstanding, I completely understand—obviously—that not every individual site is suitable for solar panels. In their response to a recent petition on this issue that attracted over 15,000 signatures, the Government cited the importance of being able to tailor requirements to individual sites as one of the main reasons why they did not back the proposal that all new builds should be required to have solar panels as a condition of planning permission. However, clearly nobody is suggesting that solar panels should be put on roofs that are not suitable; it is simply being suggested that they are put on roofs that are suitable.

During an Environmental Audit Committee hearing last week, the Secretary of State for Energy Security and Net Zero put forward some other objections to this proposal. I think that they can all be countered successfully and I will take a little time today to try to do just that.

First, the Secretary of State said:

“We know that there are many different ways to skin a cat; decarbonisation, heat pumps, whether ground-source or air, could be a solution. If you start to say this is the only technology you can use and the only solution you use, you are in danger of losing out on a potentially better solution in that particular location.”

That is what he said. However, insisting on solar panels is not akin to saying that they are the only renewables allowed, as the Secretary of State seems to think; in fact, nothing could be further from the truth. On a practical level, having solar panels to generate electricity for a home does not preclude, for example, having an air or ground-source heat pump as a renewable source of heat. Of course, solar panels are often used to help run heat pumps, because they are much cheaper and greener from an energy consumption perspective than using electricity generated by fossil fuel. From a legislative perspective, mandating solar panels on new homes is a bit like insisting that car manufacturers install seatbelts. It does not mean that they cannot also install a whole range of other safety measures.

Secondly, the Secretary of State expressed the concern that insisting on solar panels would push up the cost of a new home. However, under the Government’s changes to part L of the building regulations and, indeed, the future homes standard, house builders already have to incorporate energy-saving and low-carbon heating technologies when they are constructing new homes, which will have a cost attached.

The average price for solar panels is around £5,000; if someone wants batteries on top, the cost is between £1,200 and £6,000, according to the Energy Saving Trust. However, that is a relatively small fraction of the cost of a new home and it would quickly be more than offset by the many benefits and cost savings across the economy, including lower bills for the householder, as the hon. Member for Strangford has indicated. There is evidence that solar panels add value to a house—an average of £1,800. In addition, there are ways for the Government to mitigate any increases for house buyers, which I will say a little bit more about shortly.

Moving on, the next obstacle that the Secretary of State came up with was that mandatory solar panels would apparently cause an additional housing crisis, because of the problems with global supply chains for things such as critical minerals. Again, that argument does not really bear scrutiny. Evidence given to the Environmental Audit Committee earlier this year made it clear that if there was the right political will it was perfectly possible to source materials outside China, where the current problems lie, and that alternatives to silicon exist, such as perovskite, which can be sourced and supplied outside regions of conflict, and at low cost, to the capacity of 30 TW. Our expert witness, Dr Case, the chief technology officer of Oxford PV, said to the Committee:

“It is not a material that would be a problem if we pushed forward with deploying this technology in the future.”

Finally, another reason that the Secretary of State came up was that this proposal would stifle innovation. He said:

“To answer your question as to why we should not just simply mandate solar as the solution in, for example, the future homes standard, my answer would be that as soon as you do that, you take away innovation.”

Again, that argument simply does not stand up to scrutiny. The Government have relied heavily on the smart export guarantee to drive growth and innovation, but Solar Energy UK has made it clear that we will need something more than that to reach 70 GW. Self-consumption makes much more sense, particularly with the economics of solar being where they are now, than selling the electricity that is generated back to the grid.

In its REPowerEU plan, the European Commission explains how the policies that it advocates, including the solar rooftop initiative, will make technologies such as solar more sustainable, as well as focused on innovation right across the value chains. There is also potential for mandatory solar on homes to generate the conditions for a regulatory sandbox, with the industry working alongside house builders to trial new innovations—something that the European Commission is, again, encouraging.

With the UK seeking to build 300,000 homes a year by the mid-2020s, the industry would have a steady market, creating the conditions for innovation, greater efficiency and therefore lower costs. That would be in marked contrast to the stop-start approach that the right hon. Member for Kingswood identified in his net zero review as a significant barrier to the investment needed to meet our renewables target.

At the risk of pre-empting the Minister’s response, I want to say a few words about mandating versus the presumption that future homes will come with renewables baked in. Actually, I just want to say one word: predictability. From successive Governments since 2010 we have had the zero-carbon homes standard, the code for sustainable homes, feed-in tariffs, smart export tariffs, the energy company obligation and green homes grant. It is no wonder the net zero review found that lack of confidence in “inconsistent” Government is a huge barrier to renewables investment. That needs to change. As we know, house builders will build to the regulations.

The Government need to get fully behind solar and to help create the conditions for the industry to grow, for houses to be built with solar roofs by default, and for all that renewable capacity to be fully realised. As the Aldersgate Group highlights, providing regulatory clarity to business is also how to accelerate innovation. Governments should not just rely on markets. They need to continue to play a leadership role.

Rooftop solar installations are a British success story; when it comes to research and development, we are world leaders. Although there have been some ups and downs because of the stop-start policy framework, the rate of installation has rapidly improved in recent years. The Minister knows that last year saw more than 130,000 rooftop solar arrays installed in the UK—more than double the number installed in 2021. The industry estimates that we need a further doubling of the current pace of installation for consumer-scale systems to meet the solar power target set out in the Government’s energy security strategy. To put it another way: we need an average of 4.3 GW per year of solar to be installed, compared with the 3.2 GW installed last year. That is clearly achievable if we step up the pace. In fact, it would be less than in 2011 and 2012, at the height of the feed-in tariff era. As I hope I have successfully argued, equipping every new home with the capacity to harvest the sun’s abundant energy will drive the next stage of solar’s growth.

In the meantime, I recognise that there are still some obstacles, most notably the restricted availability of equipment and an acute skills shortage. I want to say a little about each of those and propose potential solutions.

When the Secretary of State appeared before the Environmental Audit Committee last week he referenced capacity issues in supply chains. I understand those concerns and agree that steps must be taken to diversify and develop regional supply chains, including transparency standards, but that needs to happen anyway, whether or not new homes are automatically fitted with solar. That kind of requirement would spur things on.

Overcoming the skills shortage is equally important. It demands a skills and training revolution—a solar army. The industry estimates that the 70 GW target could take us to 60,000 jobs in the UK. The previous peak was in 2014, when solar had 20,000 employees. But those new jobs need people to fill them. At present, from manufacturing to construction and engineering, from maintenance to data analysis, there is a growing gap between what is required to deliver on solar and the skills base that is coming through our training and education pathways. Solar builders are also competing against the wind and automotive industries for workers.

Requiring solar on all new homes could create an extra incentive to address the bottlenecks and, for example, unleash the huge potential there is to retrain workers from the energy sources of the past, so that they can transition to the renewable sectors of the future. Around 70% of oil and gas jobs have some skill overlap with low-carbon roles, and across Europe there are examples of good practice in using the closure of coal-fired power stations as an opportunity to draw on a new potential talent pool. For example, more than 120 people from a coal-fired power plant near Rome are being given solar panel installation training right now. Others in the industry are setting up their own training centres; Svea Solar opened three in Sweden, Spain and Germany in 2022, for example, training around 600 people.

Here in the UK, London-based Solar Skills is an example of how industry is aiming its efforts at career switchers and secondary school leavers, with bootcamp-style introductory training workshops and online training, as well as interview opportunities with existing solar companies and the potential to progress on to apprenticeship schemes in London-based solar businesses. The Trafford-based Green Skills Academy is doing exactly as its name implies, offering a number of training courses in green technologies, including solar, to support Manchester becoming a zero-carbon city by 2038. From the global accounting firm PwC to the think-tank Green Alliance, there is consensus that more people must be attracted into green energy in order to deliver on the UK’s targets.

I acknowledge that the Government are aware of the problem, but their response to date has been piecemeal. The Minister will know that the apprenticeship levy, for example, is still underspent. I hope he can say something today about an approach that is more joined-up, strategic and comprehensive.

I would also welcome the Minister’s comments on how the Government will be tackling the traditional under-representation of women and ethnic minorities in the energy industry so that, as the sector expands, that does not become more pronounced and exacerbate the skills gap challenge. Working with the sector to ensure that the workforce receives regular training to keep up with rapid technical and legislative changes must go hand in hand with addressing the skills shortage. Will the Minister tell us whether that forms part of his discussions with the solar industry? All those issues need addressing if the pace of rooftop solar installation is to keep up with the demands of consumers and the climate crisis.

My last point is about finance. The organisation 100% Renewable UK has calculated that mandatory solar panels and heat pumps in new homes would add around £8,000 to the cost of a new home, with that amount decreasing as installations gather speed. That is no more than a 4% increase on average new house prices of, as I said earlier, around £180,000. Of course, if they wanted, the Government could offer interest-free loans for this technology. They have already said that they are looking at

“options to facilitate low-cost finance”

to make it easier for retail lenders to drive rooftop deployment. What progress has there been with solutions such as property-linked finance or green mortgages, which have been identified as tools to help consumers with the capital cost of installation, or with regulation, for example, to incentivise low interest rates for green mortgages?

When I asked the Minister about solar at the last Department for Energy Security and Net Zero oral questions, he said he wanted to “go further and faster”. During last week’s Budget statement, the Chancellor proudly proclaimed that he was fixing the roof while the sun was shining. Both of those signs are encouraging, so I hope the Government will back solar in an even bigger way, starting by making it mandatory on all suitable new homes. It is a win-win policy, lowering bills and those all-important carbon emissions, while massively boosting our thriving renewables sector, improving energy security, creating hundreds of thousands of good-quality jobs and helping to level up, all at no cost to the taxpayer. That is what a rooftop revolution looks like, and that is how to ensure targets get delivered.

11.18am
The Minister for Energy Security and Net Zero (Graham Stuart)

Let me begin by congratulating the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate and giving such an impassioned, well-informed, moderate and fair speech. I say that all the more so because I think I chided her the last time we were in this Chamber. She has continued to be a champion for rooftop solar, alongside my hon. Friend the Member for Carlisle (John Stevenson), and that is a passion that I think we all share.

Deploying commercial and domestic rooftop solar is a key priority for the Government, and it is one of the most popular and easily deployed renewable energy sources, with 1 million homes now having solar panels installed. The hon. Member for Brighton, Pavilion graciously referred to the progress that has been made, and I was delighted to see that. There were 138,000 installations last year—nearly as many as in the previous three years combined. In addition, we have around the same level of solar capacity as they do in the sunshine-radiated country of Spain, and more than that of France, so, on a comparative basis, I think we have been doing pretty well. I have rehearsed this fact many times, but it is always worth sharing that just 7% of our electricity came from renewables in 2010, before we had a Conservative-led Government, and it is now heading towards half. I am proud of that.

However, I agree with the hon. Lady that that is not enough. If we are to fulfil our net zero pledges and Government aspirations in this area, we need to go further. Solar can benefit households and businesses by allowing them to reduce electricity bills significantly and receive payment for excess electricity generated. Warehouses, distribution centres and industrial buildings with high electricity demand can also offer significant potential for solar deployment, which can rapidly pay for itself through energy bill savings. Projects can be installed quickly and relatively cheaply, and that creates new local jobs and contributes to a green recovery.

The British energy security strategy affirms that the Government will aggressively explore renewable technologies, including rooftop solar, to contribute to a net zero-compliant future. As the hon. Lady said, the report out this week, which gives us the latest update on the science, shows even more starkly how important it is that we and others move in a net zero direction. We expect a fivefold increase in solar deployment to 70 GW by 2035. That builds on the 14.5 GW capacity already deployed across large-scale ground-mounted solar and rooftop installations in this country.

The Government already support rooftop solar through the smart export guarantee introduced in 2020, which the hon. Lady referred to. It enables households to receive payment for excess electricity generated, which is then sold back to the grid. In December 2021, the Government introduced an uplift in energy efficiency standards, which came into force in June 2022, and we expect that, to comply with the uplift, most developers will choose to install solar panels on new homes or use other low-carbon technologies such as heat pumps.

On the SEG, I was pleased to see just yesterday that an energy supplier, Good Energy—it is worth naming it for doing a good job—has launched a new market-leading smart export tariff for households with solar panels. It is “Power for Good”, and it will pay 10p per kWh—significantly more than rivals. That is worth highlighting, because it is exactly the kind of competition we want to see for green consumers, and I believe it will also transfer into higher deployment.

In 2022, the Government removed VAT on solar panels and on solar panel and storage packages installed in residential accommodation in Great Britain. We are also providing fiscal incentives to encourage businesses to install rooftop solar—for example, through tax relief and business rate exemptions for installing and generating solar power. We also have the Government’s energy efficiency schemes, such as the social housing decarbonisation fund, the home upgrade grant and the energy company obligation, all of which include solar panels as an eligible measure, subject to certain requirements. That all makes rooftop solar even more accessible.

As I said, whatever our record to date, we want and need to go faster. That is why, just last month, the Government published a consultation on changes to permitted development rights, seeking to simplify planning processes for larger commercial rooftop installations, and introduced a new permitted development right for solar canopies, enabling more solar installations to benefit from the flexibilities and planning freedoms that permitted development rights offer.

We have not stopped there. As part of the consultation on the future homes and buildings standards, which will be published later this year, the Government will explore how we can continue to drive on-site renewable electricity generation, such as rooftop solar, where appropriate, in new homes and other buildings.

Notwithstanding the hon. Lady’s understandable impatience—she says that we should just get on with it—in that consultation and that process this year, we have the opportunity to take forward the arguments that she and my hon. Friend the Member for Carlisle have deployed.

Caroline Lucas

Unsurprisingly, the Minister sings the praises of what the Government have done so far, but he does acknowledge that it will not be enough. I wish to come back to the industry estimate that we need a further doubling of the current pace of installation for consumer-scale systems to meet the Government’s own target. Why are the Government setting their face against all the arguments that have been amassed about making solar mandatory? He has not said why he is against doing that. As well as having this debate just now, I wonder whether he would be prepared to meet me in the coming weeks so that we can get to the bottom of why the Government do not want to go down that road.

Graham Stuart

The hon. Lady anticipates what I was going to say, because I was about to suggest that I would be happy to meet her and discuss these matters. As she said, the Secretary of State gave a number of reasons at the Environmental Audit Committee as to why mandating might not be the right thing. The hon. Lady has addressed some of those by saying that no one is suggesting that solar should be imposed on buildings where it is not suitable. It is about defining that, making sure that it is right and talking to all the various stakeholders. That is why, if we were to choose to go down that route, we would need to go and talk to people and get their inputs as well. I am all ears, because, as the hon. Lady says, we want to drive this forward and to do so in the most appropriate way.

As I said, our record to date is pretty good comparably, but we must consider what we need to do. It is not enough to be in the lead. Looking at various assessments of policy, we may be just about the only economy that is aligned with net zero by 2050 at the moment, but to stay on track we have to move ever more ambitiously forward.

John Stevenson

I commend what the Government have done. They have done a huge amount over the past 10 or 12 years, which is entirely to their credit. Interestingly, genuine cross-party consensus is emerging and Members do support what is being suggested. I tabled an amendment to the Levelling-up and Regeneration Bill, which did not go to a vote, but if were to come back from the House of Lords as an amendment to the Bill, would the Minister, given that there is quite a lot of support across the House from all parties, look seriously at reconsidering the Government’s position?

Graham Stuart

As I said, we are under a legal obligation to meet our net zero obligations, and we have set a target of that fivefold increase by 2035. We are open to argument, but we want to get the policy right. It is not our position that mandating solar on all appropriate roofs is the right policy now, but we are very open, and I am happy to meet the hon. Lady and others to discuss this further. I look forward to developing arguments to get this right, and I am sure that that is what we all want. It is not about an obsession with mandating; we want to do that which will most increase the take-up of solar in an appropriate way.

There is more to be done to meet the opportunities that rooftop solar provides. As an example, we and Ofgem recognise that connection costs and timescales can be a barrier to the deployment of rooftop solar. Currently, rooftop solar projects are required to contribute to any distribution network reinforcement needed to accommodate the connections but Ofgem has decided that, in future, for connection applications received from 1 April, rooftop solar projects will no longer be liable for such costs where the solar capacity is less than the demand on a site. Where the solar generation exceeds site demand, projects would still contribute less than they have previously. As well as reducing connection costs, this should accelerate connection times for rooftop solar.

I understand that up-front costs of solar might prevent households from installing, which is why the Government are working to facilitate low-cost finance from retail lenders for homes and small business premises, aligning with the recommendations in the Skidmore review on net zero. I meet regularly with financial institutions that have signed up to net zero and that are looking to work with us to come up with the right methods to provide the answer to the finance question, which was one of the hon. Lady’s points.

I have very little time left, but let me look down at the questions that the hon. Lady gave me to see whether there is anything to which I can usefully respond. On skills, I entirely agree with her. I am the co-chairman of the Green Jobs Delivery Group. We have refined that, and we have met a number of times. We have reduced the membership to make sure that we are focused on action—action this day, as Churchill would put it—and that we get the data from industry so that we can carry that to the Department for Education and other colleagues to make sure we have the bootcamps, the apprenticeships, the T-levels and the rest of it to prepare people for what will be a significant pipeline of future jobs—good jobs, I hope. I liked the seatbelt analogy that the hon. Lady used, with one thing not necessarily being a barrier to another, but, of course, there is always a limited amount of capital available.

In conclusion, the Government have already taken decisive action to encourage the deployment of rooftop solar. We will strive to push even further over the coming year to make sure that rooftop solar plays an even more active part in meeting our decarbonisation targets. It helps to alleviate energy costs at this time, when energy security is at the top of the public mind, and it reduces reliance on imported energy.

I thank the hon. Lady for securing the debate, for the way that she has conducted it and for the arguments she has put forward. Working in conjunction with my hon. Friend the Member for Carlisle, I am sure we can meet and take this matter further.

Question put and agreed to.