So they do listen!

The coalition government has struggled with renewables; falling out repeatedly with the industry and creating damaging uncertainty for investors by continually moving the goalposts and changing policy direction.
However, they have been more or less consistent on solar farms and the new Environment Secretary Liz Truss hammered the final nail into their coffin this week calling them ‘a blight on the landscape’.
The renewables industry hoped she would be more sympathetic than her predecessor Owen Paterson – who has now gone completely rogue by calling on the government to tear up the Climate Change Act – but she has kept up his attack on solar farms by scrapping subsidies for any new developments.
Chris Huhne drastically reduced the Feed-in-Tariff for solar power when he was Climate Change Minister and this latest announcement marks the end of a steady erosion of a misguided policy, which dates back to the previous Labour administration.
Credit
I am not claiming too much credit here, but B&ES (we were the HVCA back then) warned the government that solar farms would suck up a huge proportion of the public subsidy available for solar power in this blog in March 2011: ‘Farms are for food – not solar panels’.
It took a while for the penny to drop, but it was clear from the outset that, if farmers could make more money from FITs than from growing food, they would hand over their fields to the solar speculators.
The subsidies were designed to create a market for solar power by encouraging householders and small businesses to install panels on their roofs and, therefore, generate electricity close to the point of use and benefit directly themselves. Instead – and who can blame savvy financial investors from seizing the opportunity – commercial organisations saw them as a source of profit.
Prices
The UK now has more than 250 solar farms, which have pushed more of our food production overseas contributing to rising prices. And as I said at the time:
‘The FIT scheme was not intended to be an alternative to the equities markets, but to stimulate the generation of household renewable power. [Huhne] is, rightly, concerned that the subsidies are, instead, making their way into the pockets of so-called “shrewd investors”…’
I also warned that they risked putting the solar energy industry into reverse if they were too draconian with their cuts to the FiTs scheme – which is precisely what happened. However, getting solar panels out of the countryside and onto otherwise underused roof space was the right thing to do.
Perhaps, in this case at least, the government was listening to the industry.

Energy efficiency is not a tax

The General Election campaign is off and running as the political party conference season comes to a close and the emotive subject of housing looks set to be a key battleground.
The Conservatives tried to grab the political high ground at their conference in Birmingham by announcing 100,000 new homes for young (under 40) first-time-buyers at a 20% price discount.
This came hot on the heels of Ed Miliband’s pledge to ensure the country would have all the homes it needs by 2025. A hugely ambitious aim and almost as ambitious as the ‘war on cold homes’ announced by the Labour Party that would make it illegal for landlords to rent poorly insulated and inefficiently heated properties.
The trouble is 2025 is a long way away – and the ‘cold war’ policy would only come into effect in 2027! Our politicians are very good at taking a long-term view if it means they can get away with a huge target that they will not have to account for themselves. They are less good at making long-term decisions on energy policy.
Zero carbon
The Prime Minister has also tailored his own headline grabber for readers of the Daily Mail by insisting that the 20% discount would be achieved by exempting house builders from certain property taxes and…the zero carbon homes standard.
The ‘greenest government ever’ really don’t get this low energy thing at all, do they? This is just the latest example of them dumping low carbon measures because they regard them as a tax burden on ‘business’ and ‘hard working families’.
Unlike the car industry where the manufacturers were challenged to develop new standards and met them, the house builder appears incapable of meeting this challenge and government accepts their arguments at face value. This is not an industry that is suffering. When did you last hear a housebuilder issue a profits warning?
Stimulate
The fact is that energy efficient buildings don’t just save energy – they are also built to better standards. Why not take the opportunity to stimulate the first time buyer market with high quality, low energy housing on a cost basis that can then be replicated right across our housing market? Then it would be up to the industry to deliver.
Finding an excuse to drop energy standards is all too easy for our government. Energy saving is not a tax – it is a benefit.

Calling time on the smart meter rip off

Margaret Hodge MP, who chairs the influential parliamentary Committee of Public Accounts, believes the British public is being ripped off by the £12.1bn smart meter programme.
The Department for Energy and Climate Change (DECC) has instructed energy suppliers to install 53 million smart meters in 28 million homes and two million small businesses by 2020 at a cost of £215 per meter. The cost will, of course, be passed on to individual householders and businesses through their energy bills.
This was yet another of those ‘flagship’ green policies espoused by the government, but has turned out to be, in effect, simply a way of helping utility companies increase profits by helping them cut their operating costs.
Negligible
The impact on energy saving is now accepted to be almost negligible. Even DECC’s own figures suggest the use of smart meters will cut the average annual energy bill of £1,328 by just 2%. Not much of a return on investment – I suspect most householders would, given the choice, keep the £215.

Even this modest saving depends on consumers becoming more ‘energy savvy’ and changing their behaviour as a result of the additional information provided by the meter. That’s a huge assumption, as Ms Hodge’s committee were quick to point out, and they are clearly hard to ignore because the upshot is the second urgent parliamentary enquiry conducted by the Energy and Climate Change Committee into this issue in less than two years.
Interestingly, in the wording announcing this enquiry ‘energy efficiency’ does not figure. The Committee talks about ‘benefits to consumers, suppliers and the UK energy infrastructure’ by allowing energy suppliers to take remote gas and electricity readings and that overall ‘savings’ will be £18.8bn.
Competition
The figures are all over the place and nobody is quite sure where they are coming from. Hodge’s committee said DECC was depending ‘heavily’ on assumed competition in the energy industry to control costs and deliver benefits. ‘Relying on market forces to keep costs down may not be enough on its own to protect consumers,’ she said. ‘Energy suppliers are concerned that it may cost more to persuade reluctant customers to accept the new meters.’

Ms Hodge said DECC should require suppliers to provide ‘a clear breakdown for consumers of the cost of smart meters, their operational cost savings from stopping meter readings and whether consumers are achieving the expected reductions in energy consumption’.
There is also a very real danger that the Government is backing an obsolete technology that is actually not really ‘smart’ at all. It is already possible to control heating and cooling systems using apps on phones that are really ‘smart’ and via the Internet of Things. Consumers are also only looking for trends in energy consumption, these devices are accurate to @10% which makes them perfectly good enough for that function. The smart meter will only really reduce energy supplier costs through remote reading.
Why, therefore, is the government even consulting on the positively antiquated approach of a physical in-home display that is going to prove unpopular with consumers and logistically nightmarish to carry out? They should simply cancel the programme now and throw everything behind app-based energy information and control; invest in a huge public information programme that explains how consumers can access information and use it to save money – and save everyone £215.
With a General Election looming that would be the kind of nice little sleight of hand giveaway politicians love so much and might even convince us that the ‘greenest government ever’ has, finally, got to grips with at least one aspect of energy policy.