The Environmental Audit Committee (EAC) published a letter to the Secretary of State for Energy Security and Net Zero on 4 May 2023 setting out how the Government can achieve its ambition to install 70GW of solar generating capacity. The committee said that reaching that figure is possible on previous installation rates, but that barriers remain, including access to finance for households and the rollout of battery storage1.
The EAC 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 problem. It called on the Government to consider consulting on how it can facilitate affordable loans for households1. The committee also recognised the benefit of installing a battery alongside solar PV, and noted that a battery installed retrospectively would be subject to VAT. It is urging the Chancellor to extend the VAT discount to household battery storage1.
On grid connections, the EAC said some customers are having to wait 10 to 15 years to secure a connection for solar installations. It identified three areas where the current approach is delaying 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 permission. The committee said it heard of a regulatory failure for Ofgem to prioritise net zero1.
The EAC is calling on the Government to work with distribution network operators (DNOs) and National Grid ESO to seek short-term solutions to unblock the pipeline of delays, and is urging Ofgem to change the way it assesses investment from the DNOs and National Grid so that investment can be accelerated1.
"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."
The committee has launched a new inquiry, Enabling sustainable electrification of the UK economy, to examine barriers hindering low-carbon technologies from connecting to the grid, and to consider the potential for a smarter and more flexible grid enabling dynamic demand management and peer-to-peer electricity trading and storing1.
Why it matters for households
For a household considering solar, the committee's letter points to two cost-related barriers: the upfront capital for installation, and VAT on a battery added after the panels are in place. The EAC's position is that a battery installed retrospectively attracts VAT, which it wants changed1. Households weighing up how to pay for an installation can read our guide to finance for boilers, solar, batteries and heat pumps.
Grid connection delays of 10 to 15 years, as reported to the committee, concern connections for solar installations rather than the domestic wiring of a single home, but they bear on how quickly low-carbon generation and storage can be added to the system overall1. The committee's wider work on grid governance, storage and flexibility sits under our regulation and policy coverage, and the practical side of buying and installing equipment under our installers and retailers coverage.
What happens next
The new inquiry, Enabling sustainable electrification of the UK economy, invites written submissions addressing any or all of its terms of reference by 17:00 on Thursday 1 June1. The letter's recommendations on household loans and the VAT treatment of batteries are addressed to the Government and the Chancellor respectively; no response from either has been reported1.