In a wide-ranging letter setting out how the Government can achieve its ambition to install 70GW of solar generating capacity, the Environmental Audit Committee (EAC) calls for better collaboration to address grid constraints and access to capital for households.
Based on previous installation rates, EAC believes that achieving the Government’s 70GW ambition is possible. However, a number of key barriers are preventing the UK from achieving its full solar potential in the UK’s energy mix.
Among barriers for households are access to finance and the need to improve battery storage rollout. Solar no longer needs subsidy and is now the cheapest form of power. For many households, accessing the capital required for installation remains a problem.
Therefore, the Government should consider consulting on how it can facilitate affordable loans for households. Further, EAC recognises the benefit of installing a battery alongside solar PV. However, if a battery were to be installed retrospectively, it would be subject to VAT. To spur the rollout of batteries, EAC is urging the Chancellor to extend the VAT discount to household battery storage.
In some cases, customers are having to wait 10 to 15 years to secure a connection for solar installations. Through evidence, EAC identified three key areas where the current approach on grid connection is delaying progress: a lack of physical infrastructure such as cables and transformers; poor availability of data on solar PV generation, particularly for small-scale installations; and a ‘queuing system’ of applications where developers are applying for grid connections without the project having planning permission. EAC heard of a regulatory failure for Ofgem to prioritise net zero.
To help solve these issues, EAC is calling on the Government to work with distribution network operators (DNOs) and National Grid ESO to seek some short-term solutions to unblock the pipeline of delays. It is also urging Ofgem to change the way it assesses investment from the DNOs and National Grid so that investment can be accelerated.
In light of the concerns around grid connection raised in the Committee’s work on onshore solar power, and in numerous inquiries ranging from Accelerating the transition from fossil fuels and securing energy supplies and Technological innovations and climate change: Community energy, the Committee has today launched a new inquiry examining this issue in greater depth.
‘Enabling sustainable electrification of the UK economy’ will examine barriers hindering low-carbon technologies from connecting to the grid. It will also consider the potential for a smarter and more flexible grid which enables dynamic demand management and peer-to-peer electricity trading and storing.
Environmental Audit Committee Chairman, Rt Hon Philip Dunne MP, said: “There is potential for solar energy to have a bright future in the UK, but a dark cloud of delays for the industry hinders the ability to meet its full potential. Evidence to our Committee made clear that the UK has the potential to fulfil the UK’s ambition of 70GW of generating capacity from solar. But sticking points for households around access to finance and VAT being slapped on batteries remain.
“The ability for low-carbon energy sources, including solar, to be able to connect to the grid could seriously jeopardise Net Zero Britain. Our solar inquiry found that some developers wait up to 15 years for a grid connection: this simply isn’t good enough. We must make sure that concerns around infrastructure and planning are addressed swiftly.
“Given our Committee’s mounting concerns over grid connections for low-carbon energy projects, we are today launching a new inquiry that will consider this in greater detail. I encourage anyone with views on these issues to submit evidence.”
The Committee invites written submissions addressing any or all of the issues raised in the following terms of reference, by 17:00 on Thursday 1 June.
