John Stevenson: I beg to move, That this House has considered solar panels on residential properties.
It is a pleasure to serve under your chairmanship, Mr Owen. I am delighted that the House has the opportunity to debate solar panels and their potential benefits to consumers and the wider community.
Quite simply, energy matters. It heats and lights our homes. It drives industry and commerce and, of course, is central to transportation. Therefore, energy policy also really does matter. The Government have recently taken the initiative with their proposed industrial strategy, which is a potentially welcome development. However, central to any industrial strategy must be an energy policy—and an effective energy policy, at that.
It is obvious that in any industrial strategy we would want to see the plentiful supply of energy and the security of such supply, and competitive prices for the industrial, residential and private sectors. Our energy policy must seek to achieve those goals. Part of achieving those goals will undoubtedly be the energy mix. From the Government’s perspective, it is entirely logical that we want to have a healthy base-load to ensure the supply, particularly through the busy periods of demand or times when some renewables will be less able to generate energy. Such an energy mix will be made up of carbon, which I think we all accept is declining—indeed, I think there was acknowledgment recently that, for the first time ever, we had not used coal—and, of course, nuclear and renewables.
As an aside, it is interesting from my perspective in Carlisle that my county of Cumbria can be very much at the centre of our energy policy, because of the nuclear on the west coast and the proposed new build there, and also because there are a large number of renewables in Cumbria, particularly wind. There are opportunities with tidal power and technology with regard to rivers. Cumbria has a real opportunity to be very much part of any future energy policy and of the energy mix.
Any energy policy must allow for innovation—new ideas, new concepts and new systems. That can take many forms, but one clear example right now is battery technology. I think it is accepted that battery technology has the potential to transform not only the renewables industry but the whole energy industry, including the transport sector. An emphasis on battery technology and the research that needs to go into it must be a priority of our energy policy. It must be accepted that promoting innovation is central to any energy policy and industrial strategy.
The questions that then arise are: how are we to achieve that laudable aim; should this be centrally planned; should Government take the lead; and should the taxpayer be the key investor? Some undoubtedly would argue that it is the Government’s job to drive this potential change and that it is the responsibility of the taxpayer to be central to the investment required. I accept, as I think most people would, that there has to be Government involvement; that is required, particularly regarding regulation and standards. However, my view is that the market can provide the solution to many of these issues. The Government need to take an active role to create an environment in which the market can provide many of the solutions.
Alex Chalk: Does my hon. Friend accept that it was the intervention of the Government, particularly in subsidising the rates that could be received for the use of solar panels, that kick-started the industry, and that Government intervention can be expected to do the same for battery technology, ultimately securing an industry that might not have prospered but for Government intervention?
John Stevenson: To a certain extent, I agree with my hon. Friend. Clearly, where Government intervention is channelled properly, it is worth while. Sometimes, subsidy and Government funding are required. I just think we have to be a little bit careful about getting the balance right, and there are times when Government involvement in the regulation or standards can create as great a benefit as subsidy. I will come to that point in a minute.
Through simple regulation, the Government can create an environment that will allow for much-needed competition and certainty for the market. Businesses, as we all know, lack a degree of certainty, and creating a market that has certainty would be beneficial. Regulations can also create innovation, with new ideas and products coming to the market. They can avoid, where possible, the need for subsidy by the taxpayer. They can create a market that is sufficiently large to entice new businesses to enter it and, indeed, encourage existing businesses to expand and invest in it.
I come to the issue of solar panels and residential properties. Solar is now, as my hon. Friend Alex Chalk highlighted, an accepted and established form of renewable energy. Indeed, I believe that somewhere in the region of 850,000 houses up and down the country have solar panels on their roofs. The UK turnover for the solar industry was estimated at £3.2 billion in 2015. The number of full-time employees involved in the industry is estimated at more than 16,000, and the amount of energy created by solar was around 15% of that created by renewables generally. The industry has enormous potential to grow much further and become a far greater part of the energy mix in this country.
We, as a society and a country, want clean energy. We want sustainable energy, and of course we want that energy at an affordable price. To date, we have had mixed success with regard to renewables, and in particular solar panels. For example, they have been heavily subsidised. I accept the point that kick-starting the industry was a requirement, but perhaps we have reached the point where it has become unnecessary.
We build more than 150,000 new properties per year. As we all know, there is a requirement to build many, many more houses, probably towards 300,000 a year. Housing, as we recognise, is a major issue for this country. It is also a huge industry. By bringing together a variety of issues, with a simple change to building regulations, we can create a market for solar panels that will be enormously beneficial and not require any taxpayer subsidy.
Alex Chalk: Is it not important to recognise how far we have come? The fact is that cloudy Britain generates more energy from solar panels than sunny Italy. Does that not say something about what has been achieved in this country, in this vital sector?
John Stevenson: Yes, I agree wholeheartedly. Indeed, that demonstrates the importance of technology and innovation. We are a cloudy country, particularly in Cumbria at times, but if we have the right technology, we can maximise the benefit of sunlight, which can have a huge benefit for the energy sector.
We already use building regulations as a vehicle to ensure high-quality windows, high-quality boilers and other aspects of construction. It is an accepted fact that building regulations are a critical part of the construction industry and have the ability to drive up standards and change. I hope the Minister will comment on that. I believe a review of building regulations will go on very shortly, so I will be interested to hear what he has to say on that point.
My suggestion is that we make it compulsory that all new residential properties built from some point in the future have solar panels and appropriate connections. I accept that the date would have to be two, three or maybe more years hence, so that the industry has enough time to prepare and adjust, to allow businesses already in the industry to either expand or invest, and to allow new entrants to come into it. That would give the building industry enough time to prepare to have solar panels and appropriate connections in each and every property.
What are the benefits? As I have said, there is a market of 150,000-plus new units every year, and it could be up to 300,000. Therefore demand for the product would not be an issue; there is a ready-made market. The sheer size of the market will drive down prices. The market and the volume involved will, without a shadow of a doubt, lead to innovation. It will lead to cheaper and more attractive panels. I think we all agree that some of the solar panels on top of roofs are not particularly attractive, and the opportunity for aesthetic innovation and new ideas is undoubtedly there. In many respects, solar tiles would become the norm, rather than solar panels. Without a doubt, we would see more efficient panels as well. My hon. Friend the Member for Cheltenham touched upon that. We have lots of grey skies, but with more efficient panels, we could still generate plenty of electricity.
This proposal would help in other ways. The large solar panel market would have consequences for other parts of the sector, such as the battery industry, which I have touched on. I was contacted by the Hot Water Association, of all things, which indicated that with improved solar panels and a bigger market there would be improvements in boilers. There is a connection between solar panels, boilers and so on.
There would be no need for Government subsidy. I accept that initially there may be a slightly higher price for properties, but the time to put in solar panels is when the property is being built, the scaffolding is up and workmen are on site. That drives down costs and, more importantly, in the long run there will be a saving in electricity bills. Changing building regulations would create and achieve many worthwhile objectives: sustainable energy, help with battery technology, lower energy prices for households, a contribution to the national grid and an undoubted boost for UK industry through jobs, research and development. We could create a market in this country and I would like to see British industry and British business at the forefront of this technology.
We must not forget the second-hand market. Some 850,000 houses have solar panels. If the price drops and there is innovation, the second-hand market would seize the opportunity to install solar panels, particularly when properties are being re-roofed. I like to think that in five years, well over 1 million houses would have benefited from this simple change. There would be other opportunities for the Government to consider: commercial property, which I have not even touched on, and Government properties such as schools and hospitals. In time, policy could be adapted to incorporate such buildings.
I acknowledge that the Minister is not about to congratulate me and announce a policy change with immediate effect, but I suggest that sometimes in life, a simple adjustment to policy can bring the greatest benefit. Opening up a market creates new commercial opportunities, innovation and benefits for our society. I believe this policy would benefit thousands of homeowners up and down the country. It would be good for the environment and it would be good for the country. It would be a win, win, win situation.
Will the Minister consider this policy initiative and ask his Department to consider the implications and benefits that would flow from it? It should seek the views of the solar panel and renewables industry and, of course, the construction and building sector. Will the Minister report to the House the Government’s conclusion and, if the proposal proves to be realistic, which I believe it will, confirm that they will introduce the appropriate changes to regulations to enable this to happen? I look forward to the Minister’s comments.
Alok Sharma: It is a great pleasure, Mr Owen, to serve again under your chairmanship this morning. I thank my hon. Friend John Stevenson for bringing forward this debate. During his time in Parliament, he has shown an incredibly keen interest in the energy sector, and he has done so again in this debate.
It is clear that all of us in the Chamber share the common goals of wanting new homes to be energy efficient and their occupants to have low energy bills. I recognise that there is a desire among homeowners and the wider public to contribute to sustainable development and to generate their own green energy. As my hon. Friend will be aware, the Government have just helped to secure new investment in solar panels to produce electricity for affordable homes across England and Wales.
John Stevenson: The Minister is making an interesting point and he is absolutely right. It is interesting and bizarre that in a mixed build of social and private sector housing in Carlisle, the social housing ended up with solar panels on the roof, but the private sector housing did not. That seems to be an anomaly. Why was it not done for both?
Alok Sharma: I will address my hon. Friend’s point about whether we should mandate a particular technology, but in an announcement last weekend, the Minister for Trade Policy, my right hon. Friend Greg Hands, welcomed £160 million of capital investment in UK renewable energy, backed by Dutch investors. This first step is a £1 billion programme to give 800,000 lower-income households access to cheaper solar electricity.
My hon. Friend talked about building regulations. Our building regulations and planning reforms encourage the use of renewables without mandating any particular technology. In the previous Parliament, we twice strengthened the energy requirements in building regulations, introducing tough but fair minimum standards. Home builders are now required to deliver highly energy-efficient homes that typically reduce energy bills by £200 a year, compared with homes built before 2010.
The energy requirements do not prescribe the technologies, materials or fuels to be used. That allows builders the flexibility to innovate and select the most practical and cost-effective solutions in the circumstances. Those solutions could indeed include solar panels— my hon. Friend talked about the example from his constituency—but they may not be appropriate for some types of building or location. For example, the use of solar panels is more limited on high-rise blocks, because there is of course proportionately less roof space available per apartment in the block.
The Government are carrying out a review of energy standards for new homes. We are examining the costs of making energy improvements and the benefits in fuel bill and carbon savings. That will allow us to consider the impact on housing supply, as more costly regulatory requirements may make housing development less viable in some areas.
My hon. Friend talked about building regulations more widely. The recent tragic event at Grenfell Tower shocked us all deeply, and we want to ensure that such an event never happens again in our country, but we also need to learn any broader lessons that may emerge. That is why an independent review of building regulations and fire safety is being carried out by Dame Judith Hackitt. We are waiting to see the outcome of that.
Planning reforms are also contributing to more deployment of solar panels on rooftops. In April 2015, we introduced new planning measures that allow for a twentyfold increase in the amount of solar that can go on to the roofs of non-domestic buildings without a full planning application having to be submitted, through the exercise of permitted development rights.
Of course, regulation and planning are not the only ways to increase the installation of renewable systems; incentives play an important part. My hon. Friend Alex Chalk talked about how the solar sector has been assisted during the past few years through Government incentives. The feed-in tariff scheme is a Government programme designed to promote the uptake of a range of small-scale renewable systems, including solar panels. Homeowners who install solar panels receive payments for the electricity generated, use that to save money on their bills, and sell any surplus electricity not used back to their supplier. Similarly, homeowners can be paid under the renewable heat incentive scheme for hot water provided by solar thermal panels. Feed-in tariffs have proved highly popular with homeowners. The scheme was introduced in 2010, and there are now close to 1 million solar panel installations on homes. The economy of scale has helped to reduce the cost of a typical domestic solar panel installation from about £20,000 to £7,000.
Smart meters will offer a range of increased functionality, including the ability accurately to measure exported electricity from solar panels. The Government are committed to ensuring that every home and small business in the country is offered a smart meter by the end of 2020. More than 1 million smart meters were installed in the first quarter of 2017, and almost 7 million smart meters are now in operation across the country.
As our energy system and the way we interact with it changes, installing storage technologies such as batteries, to which my hon. Friend the Member for Carlisle referred, as well as solar panels can help consumers to use energy when it is cheapest, and they can be rewarded with smart tariffs for being flexible about when they use energy. As hon. Members may be aware, in July my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy announced a plan to give homes and businesses more control over their energy use and to support the development of innovative battery technologies.
The Government recognise the important contribution that solar panels on buildings are making in creating a low-carbon future, and we have a range of current and planned policies to promote their uptake further. However—I hope that my hon. Friend the Member for Carlisle will not be too disappointed when I say this—ultimately we do not want to mandate the use of specific technologies. The decision on the use of renewable technologies needs to be determined by what is most practical and cost-effective in the circumstances in which builders find themselves.
Question put and agreed to.