HC 1605 Energy and Climate Change and Environmental Audit CommitteesWritten evidence submitted by G-CEL
Summary
G-CEL is a community based programme operator promoting free solar panel installations to low income families.
We propose a definition of a community based programme operator.
We would like to see a return to the original tariff reduction recommended in the governments 2010 announcement of the FIT tariff with consideration being given to establishing a community based project FIT tariff.
We consider the proposed changes to the FIT tariff to be detrimental to the solar PV industry in general and will specifically exclude low income families from the energy saving benefits.
The proposed reduction in the FIT tariff has had a major impact for funding community based projects. To the extent that private funders have withdrawn from the market place.
We consider the affordability of the Solar PV programme to be acceptable when compared to the environmental benefits accrued from widespread installations of solar panels
Background
G-CEL was established as a community based organisation working within the socially deprived areas of Wales. Each member of the organisation is an established practitioner in the provision of services to support the local communities they represent.
G-CEL welcomes the opportunity to provide evidence to the Joint Audit Committee and Energy and Climate Change Committee G-CEL is a newly established social enterprise working in some of the most socially and economically deprived areas in South Wales. The company has been formed to provide support for households in fuel poverty, economic inactivity and low incomes. Our definition of a Community project is as follows:
A Community based PV Programme
The definition of a Community based PV programme is one that is:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
A Community PV Programme Operator
A community based PV programme operator and its partner organisations will be one that provides a valuable service to the community it represents on a not-for-profit basis. Ideally the organisations will have charitable status and will have been operational in the community for at least five years before 31 March 2012.
Community Organisations Working in Partnership
The Community based PV programme operator may have formed partnerships with other such organisations within a close geographic area, to obtain maximum benefit from a regional approach to the programme.
Beneficiaries within the Community
A community based PV programme operator will have as its clients, households experiencing multiple deprivations, including high levels of unemployment, long-term limiting health problems, fuel poverty, child poverty, and low levels of education and social mobility. Many of these households will have been encouraged to enrol for the PV programme in order to provide some relief from escalating energy prices. Within a community PV scheme the householder will be regarded and treated as an active citizen with a role in supporting and abetting the transformation of their community rather than simply as a passive client. The community scheme will seek to deepen and broaden the relationship to incorporate other elements such as energy efficiency, renewable heat and community development so as to continue to bring benefits both to participants and the communities in which they live.
Furthermore, profits generated through the business will create a community fund that will be used to create training and employment opportunities, new social enterprises, new active citizen schemes and young people’s networks. This opportunity will be lost without an extension for this particular community project.
Long Term Implications and Responsibilities for these Organisations
The management of community based PV programmes can be both productive in supporting the existing work of these social enterprises and to provide long term employment opportunities based around maintenance, training and administration. The integration of energy efficiency into the “whole” community approach will add value to economic and environmental savings attributed to that community.
Retaining locally generated money from the FIT within the local economy supports the “local multiplier effect”, in which money that continues to circulate locally accrues value as it is retained. Supporting such local, inward investment from the FIT can lead to the relative value of that investment being multiplied three or fourfold, with significant positive impact on the local economy.
The long term stability of the PV programme will be enhanced by having a “local” and “accountable” organisation that can administer such aspects of the programme as change in property ownership, issues relating to maintenance, roof rental payments, monitoring progress towards higher energy efficiency targets and supporting future renewable energy programmes.
Recommendations
We recommend that DECC consider this definition of a Community Project within the context of this and future consultations when referencing Community based Solar PV projects.
G-CEL welcomes the opportunity to provide evidence to the committees as following: Our evidence, which focuses on the areas of G-CEL’s activities in the domestic sector and related issues, these comments, should not be taken as representing the views of the individual members of G-CEL.
G-CEL strongly supports the UK Government’s target to reduce CO2 emissions especially it’s longer-term ambition of a 60% reduction by 2050. However, it is clear that these challenging targets will not be achieved without the introduction of additional and innovative policy measures
The proposed linkage between solar PV FIT payment and improvements in energy efficiency in domestic properties is to be welcomed, however, We believe that many householder living in properties in the category “Hard to heat” will be severely disadvantaged due to lack of ability to pay for energy efficiency measures. (DECC estimated cost for energy efficiency measures in a solid walled property is £14,000)
G-CEL believes that the UK Government’s targets are achievable if the right policy framework is developed and implemented with regards to the FIT payment mechanism.
1. State of the solar energy market and impact of solar PV to date:
Evidence - The solar PV industry is in a state of uncertainty due to the recent DECC announcement regarding the cut in Feed in Tariff and the rescheduling of the cut off date to the 12 December. Many feel this is unacceptable and stand to lose financially if these recommendations are implemented. G-CEL considers the proposed changes to be detrimental to progress in community based programmes such as our PV4FREE.
We suggest a staggered reduction in the FIT payment in line with the recommend structure originally proposed in the 2010 announcement. Consideration should be given to providing a special community based projects FIT rate valid until 31 March 2013.
2. Balance between affordability and delivering the objectives of solar PV, including factors to consider when setting the rate of small-scale FITs, i.e. jobs created, emissions reduced and behavioural change.
Evidence - G-CEL operates a community based FREE PV programme funded by private finance. The proposed reduction in the FIT tariff will put our programme under threat of closure. This will have a detrimental effect on job security within the solar PV industry and locally curtail out efforts to create jobs linked with installations, maintenance and associated energy efficiency advice provision. G-CEL has aspirations to create a community based energy efficiency programme interdependent on the PV programme thereby providing low income families with greater access to energy efficiency advice.
We predict that the solar panel industry will suffer severe cut-backs in the number of solar PV installations registered after 12 December 2011 and a consequential “knock on” effect of lost employment opportunities and manufacturing job losses being ranked in the thousands.
Within the UK over a quarter of CO2 emissions come from households. Another quarter comes from cars and public transport. Over 70% of emissions come from buildings and transport of which the majority will come from the household sector. The real climate change challenge and the biggest potential reductions in emissions are from our streets and homes. These changes must be driven by both the EU and national governments. Without the awareness, support and action of millions of EU citizen’s climate change goals will not be delivered. A “low carbon economy” can only be built by a “low carbon society”.
3. Governments management of the Solar PV FITs, impact to date and their management of the consultation
Evidence – G-CEL does not wish to comment specifically on the government’s management of the Solar PV FITs in general. However we will say that until the release of the recent consultation the FITs rates were clear and precise. The long term forecast for the PV solar industry was on a sound footing with considerable incentives to provide growth for the foreseeable future. A 20% to 25% reduction in the FIT payment on 1 April 2012 would have been an acceptable reduction for the industry. We would be appreciative of any consideration of a special FIT tariff for community based solar PV programmes – any return to the original community based energy generation concept would be welcomed.
Since the release of the consultation there has been uncertainty in all aspects of the Solar PV industry. The consultation indicated that the date 12 December was to be the cut-off date for the 43.3p/kW FIT, and further, even if installations were to proceed after that date the rate would only be payable until 31 March 2012. This provided zero financial incentive for purchasers to consider proceeding with installations after this date. We feel the consultation was ill-timed and poorly thought though. Giving a firm date of the 12 December while the consultation has a deadline of the 23 December – not really a consultation is it?
4. Affordability of solar PV energy versus other renewable energy and the impact of FITs on energy bills
Evidence – G-CEL is unable to comment on the question of comparative renewable energy sources as it is outside our remit. We would offer the following observation on the impact on energy bills. Assumption - there are 25 million households in the UK for every 25,000 solar PV installations each earning an average £1,000 per year the averaged cost per household would be £1 per year. These installations would generate 51 million kW of electricity from carbon neutral sources and reduce green house gases by 25,000 tonnes of CO2 emissions annually.
5. Experience of other incentive mechanisms in other countries.
Evidence – G-CEL is unable to comment on this question as it is outside our remit.
Information for the Committee
Why the committee should support community based energy programmes?
G-CEL and other national energy efficiency agencies can show people how to make a difference, but the maximum impact will come only with the whole hearted commitment of the EU and national governments through their leadership, regulation, taxation and spending policies.
In the opinion of G-CEL, politicians should be implementing major policies that result in real action in key generic areas to help individuals reduce their personal environmental impact:
Support Organisations that deliver change at a Local Level such as G-CEL
To deliver the required sea-change in understanding and behaviour on energy efficiency and a low carbon society, action must be rooted in local initiatives to change our behaviour in the home. Our day to day use of energy is significantly influenced by locally based organisations. Retailers, installers and dealers should be encouraged to advise us to use the greenest products; local authorities have a key role to play in planning and local leadership; whilst neighbourhood champions and community based organisations are the key influencers of behaviour.
G-CEL believes that the key priority is to encourage home owners to invest in greening their homes through incentives in property/energy efficiency improvements and those that can afford to invest should be encouraged and those that are unable to invest should have open access to such free measures that would provide maximum benefit both now and in the future.
G-CEL would like to raise the issue of funding mechanisms for community based projects as integral to this work of the committee. The ethos on the community-based project is to provide households experiencing fuel poverty with free solar panels that are maintenance-free and insurance-free to the householder. This type of programme requires a long-term commitment from local community based organisations to undertake the management of these installations for 25 years. These community based organisations will be ideally placed to co-ordinate a holistic community energy efficiency programme based on the foundation stones laid under the FIT programme. G-CEL recognises the importance of reducing energy use and improving domestic energy efficiency across communities, and as such would recommend an enhanced FIT payment for such community based programmes. Consideration should be given to financial incentives to funders of community based projects and government support for organisations promoting these community-based projects. We recommend a community FIT payment of 43p/kW until 31 March 2013.
30 November 2011