The chair of the Business, Energy and Industrial Strategy (BEIS) committee has raised concerns with the acting energy minister about the government’s axing of support for small scale renewable generation.
Rachel Reeves has written to Chris Skidmore, pressing the acting minister of state for energy about progress on its plans to replace the export tariff, which provided a guaranteed level of payment for any exports of electricity to the grid from micro-renewable generation.
The withdrawal in April of the export tariff has left households who want to install renewables devices in “limbo” for months, according to the Solar Trade Association (STA).
Two months after the closure of the export tariff, the government has not yet published policy proposals on the smart export guarantee (SEG), its mooted replacement for the export tariff.
In her letter, Reeves writes: “We remain concerned that consumers who installed these technologies after the export tariff closed continue to be the only generators not paid for the power they feed into the electricity network.”
Reeves also raises concerns about a recent surprise proposal by the HMRC to raise the VAT rate on household renewable generation materials.
“You will also be aware that HMRC is proposing to change the way that the reduced-rate of VAT is applied to solar and other household renewables. We are concerned that the potential VAT rise poses a threat to the most cost-effective collective purchase schemes; premium schemes such as those combined with complex ‘smart’ technologies; and installations of solar and battery storage.
Reeves has asked Skidmore about when BEIS was first made aware of the potential change in VAT treatment, the impact this rise will have on broader decarbonisation efforts and when the government will publish its plans for the SEG. She has asked for a reply by 17 June.
Commenting on the letter, STA director of advocacy and new markets Léonie Greene said: “People want to act on climate change and nearly two-thirds of people want to invest in solar and battery storage. It is very difficult to understand why the government is making it harder than at any time over the past decade to do so, even compared to fossil fuels.
“Policies must be ramped up to deliver on net-zero and the public must be meaningfully engaged – few technologies engage the public better than solar. We are grateful to Rachel Reeves and her committee for continuing to press for desperately needed answers.”
The letter follows the publication of new figures showing that deployment of solar generation devices hit a near ten-year low in April.