The Environmental Audit Committee (EAC) launched an inquiry on 4 May 2023 into the sustainable electrification of the UK economy, examining the barriers that hinder low-carbon technologies from connecting to the grid1. The inquiry, "Enabling sustainable electrification of the UK economy", will also consider the potential for a smarter and more flexible grid enabling dynamic demand management and peer-to-peer electricity trading and storing1. Written submissions are invited by 17:00 on Thursday 1 June1.
The launch follows a letter from the EAC Chair to the Secretary of State for Energy Security and Net Zero setting out how the Government can achieve its ambition to install 70GW of solar generating capacity1. The Committee said that, based on previous installation rates, that ambition is possible, but that key barriers are preventing the UK from achieving its full solar potential1. Among the barriers for households it identified access to finance and the need to improve battery storage rollout1. It said solar no longer needs subsidy and is now the cheapest form of power, but that for many households accessing the capital required for installation remains a problem1.
The Committee also said that installing a battery alongside solar PV brings benefits, but that a battery installed retrospectively would be subject to VAT, and it is urging the Chancellor to extend the VAT discount to household battery storage1. On grid connections, it said some customers wait 10 to 15 years to secure a connection for solar installations, and identified three areas where the current approach delays progress: a lack of physical infrastructure such as cables and transformers; poor availability of data on solar PV generation, particularly for small-scale installations; and a queuing system of applications where developers apply for grid connections without the project having planning permission1. The EAC said it heard of a regulatory failure for Ofgem to prioritise net zero1.
"the Government should consider consulting on how it can facilitate affordable loans for households"
"the Committee has today launched a new inquiry examining this issue in greater depth"
The inquiry's terms of reference cover grid connection delays and bottlenecks onshore and offshore, delays to necessary infrastructure, insufficient scale or capacity, supply chain and skills constraints, and access to finance1. They also cover storage, transmission and distribution, demand management and flexibility, interconnection with neighbouring grids, and the effect of growth in demand from electric vehicles and heat pumps on balancing supply and demand1. Governance questions include whether Ofgem is fit for purpose as a regulator and whether it should have a net zero remit, and whether the current Electricity System Operator or the proposed Future System Operator has sufficient powers1.
Why it matters for households
For a household considering solar panels or a battery, the inquiry touches on two of the practical constraints: the cost of capital and the time taken to secure a grid connection. The Committee's position is that solar is now the cheapest form of power and does not need subsidy, but that the upfront capital remains a problem for many households1. It has asked the Government to consider consulting on facilitating affordable loans1, and has urged the Chancellor to extend the VAT discount to batteries installed retrospectively1. On connections, the reported waits of 10 to 15 years relate to solar installations, and the Committee's stated causes include infrastructure shortages, poor data on small-scale solar PV generation and applications made without planning permission1. The inquiry also covers demand management and flexibility, and peer-to-peer electricity trading and storing, which bear on how a home's generation and storage could be used1. The terms of reference ask what role localised mini-grids and decentralised energy distribution should play1. No decisions have been taken on any of these points; the inquiry is at the evidence-gathering stage.
What happens next
Written submissions addressing any or all of the issues in the terms of reference are due by 17:00 on Thursday 1 June1. No date has been reported for the Committee's report or for any Government response.