Introduce affordable loans for home solar and energy storage, MPs tell Government

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The cross-party Environmental Audit Committee (EAC) has warned Energy Security and Net-Zero Secretary Grant Shapps that the UK is likely to miss its 2035 target of hosting 70GW of solar by a “considerable” margin without “urgent” action.

The target was set in March after first being recommended in January through Chris Skidmore MP’s Net-Zero Review. The Government is in the process of setting up a solar industry taskforce to plot a pathway to delivering this target.

In the meantime, the EAC has expressed concerns about slow progress in addressing some of the key barriers to solar deployment in the UK.

Chief among these concerns are delays in grid connection, resulting from a cumbersome planning process. In some cases, customers are having to wait 10 to 15 years to secure a connection for solar installations, the EAC has heard. Delays plague both utility-scale solar farms and small-scale arrays.

The Committee is calling on Shapps to press forward with a net-zero remit for Ofgem, as recommended in the Net-Zero Review. It is also recommending collaboration between the Government, National Grid and electricity distribution network operators to “unblock the pipeline of delays” and to plot a way of improving the grid in the long-term.

National Grid is notably in the early stages of the biggest grid upgrade in generations. The National Infrastructure Committee (NIC) is also working with Ministers to reform the planning process for large energy projects.

EAC chair Philip Dunne MP said: “The ability for low-carbon energy sources, including solar, to be able to connect to the grid could seriously jeopardise net-zero Britain.

“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.”

Support for solar homes

The EAC’s letter makes it clear, though, that the UK cannot rely exclusively on grid-scale projects to meet its 2035 solar targets. There will also need to be a significant uptick in rooftop solar, on both commercial and domestic properties.

Around 1.2 million of the UK’s 25 million homes have solar. Among the barriers to solar adoption for the others are access to finance and the need to improve battery storage rollout.

On the former, the EAC is calling for the Government to assess how it could facilitate more affordable loans for homes looking to fit solar. Ministers could also work with banks on solutions such as green mortgages.

On the latter, the EAC heard concerns that batteries installed in homes or businesses after solar panels are fitted are not eligible to benefit from the zero rate of VAT introduced in spring 2022. Its letter calls on Shapps to work with the Chancellor to consider extending the VAT discount rate to household battery storage fitted retrospectively.

It also asks him to consider re-assessing the Government’s position on community renewable energy including solar. Community Energy England has stated that just 23 new community-owned renewable energy generation assets were installed in 2021, the lowest number since 2017.

The EAC has requested that Shapps responds by the start of June.

The letter from the EAC comes just days after the Business and Trade Committee rapped Ministers for failing to produce a “coherent, overarching plan” to end unabated fossil-fuelled electricity production by 2035.