More solar “clearly in Treasury’s interest”, say lobbyists urging price reforms


Liz Truss’ new steps to curb soaring energy prices mean expanding Britain’s installed base of solar generation makes more sense than ever, trade body Solar Energy UK argues.

Yesterday’s unveiling by the Prime Minister of her new ‘price guarantee’ for energy puts taxpayers on the hook for near-stratospheric billions of pounds over the next two years, heavily benefitting the fossil fuel sector, according to independent analysis.

Those costs, estimated by the Financial Times to be as high as £90 billion for homes and £60 billion for businesses before April, spell out ever more starkly that decarbonising UK power is in the national economic interest, says SEUK.

The solar lobbying body has pledged to work with Truss’s new ministers – including energy secretary Jacob Rees-Mogg and his predecessor Kwasi Kwarteng, now chancellor –  to secure that aim.

“The economics of rooftop solar have never been better – and we have the evidence to prove it,” said Chris Hewett, Solar Energy UK’s chief executive, pictured.

“But while they drive down the cost of energy for homes and businesses, the UK is in dire need of new solar farms to provide cheap, green, secure power for all of us”, he added.

In six years, the nation’s base of PV generation commissioned in fields and on rooftops has risen 35%, to over 15GWp.  Renewed demand spurred by global recovery from Covid, and accentuated by Putin’s weaponisation of Russia’s gas supplies, has accelerated that upswing still further.

The trade body last week rebutted a claim from one planning consultancy that new PV farms are encountering greater resistance from planning authorities.

Renewables organisations earlier this week revealed their willingness to tackle market reforms to remedy the crisis in retail costs of energy.

Before Truss flagged up yesterday the prospect of de-coupling renewables-sourced electricity from gas-dependent costs used in Ofgem’s price cap calculations, Solar Energy UK, plus wind lobbyists the Renewable Energy Association and producers’ umbrella group Energy UK had agreed in outline a voluntary plan favouring a more efficient power market.

The trio adopted an idea from the UK Energy Research Centre think tank.  It would tie suppliers’ continuing contracts agreed under the now-closed Renewables Obligation (RO) scheme, into a new fixed-price scheme modelled on established Contracts-for-Difference reverse auctions.

About a quarter of UK power consumption is provided by RO generators. Before closure to new entrants in 2017, the RO system successfully pushed renewables’ generating costs –  particularly solar – so low as to remove any need for subsidy.

Most power produced under the RO is sold far in advance, the would-be reformers contend. Thus, they argue, income received by generators currently does not reflect greatly increased prices in wholesale spot markets.  Under current pricing regimes, with high market prices set to endure for the foreseeable future, consumers and voters risk yet higher rises, and retail costs will rise further if the regime is not reformed urgently, the groups argue.

Decoupling gas from its dominant role in driving the regulator’s assessment of power prices, is the key.

The renewables bodies see their reform as tying in with the government’s current Review of Electricity Market Arrangements, public consultation on which closes on 10 October.  They contend their notion would improve investors’ confidence, unlike the deterrence often claimed for windfall taxes now enacted in France, Germany and other jurisdictions.

Solar Energy UK hailed Truss’s pledge in the Commons yesterday to “speed up our deployment of all clean and renewable technologies”, including solar.

The body said: “The Prime Minister’s statement offers some reassurance to the industry after she dismissed the development of solar farms during a campaign debate. However, it is far less specific than measures being announced to speed up oil and gas exploration”.

“Expanding fossil fuel production will have no impact on consumer bills and be no panacea for the country’s economic woes and conflicts with the government’s climate commitments”, Hewett cautioned.

“We look forward to engaging with the review of net zero by Chris Skidmore MP, chair of the Conservatives’ parliamentary Net Zero Support Group”

Truss’ appointment to D-BEIS of Jacob Rees-Mogg, hitherto a doubter of human causality in the climate emergency, has raised fears among green campaigners.  But sources close to the solar industry note the former Brexit minister’s advocacy for the technology as a cost-saving measure in running government buildings.

Completing Truss’s intended ministerial team at D-BEIS are junior ministers Jackie Doyle-Price and Graham Stuart.  Stuart will attend Cabinet.

As reported last night, the Queen’s death yesterday, coming before royal warrants could be issued, may delay the formal accession to office of some junior ministers.


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