KCEL: Open letter to Claire Perry MP : Energy blog

KCEL: Open letter to Claire Perry MP

Published by Sam Page on 28 January 2016

An Open Letter to Claire Perry MP from Transition Marlborough

Dear Claire

Re: The Future of Community-Owned Solar PV in Devizes

As your constituents, we are aware that you are a passionate believer in localism and strongly back the need to develop local business opportunities for people like us. We were very surprised and dismayed, therefore, that you added your support to the latest assault on the renewable industry, which was showing so much promise in the Devizes constituency and the South-West. This seems to be a contradiction and we are keen to know why.

The massive reduction to the Feed-in Tariff (FIT) and the sudden abolition of tax relief for small investors, has now effectively killed our community energy company, Kennet Community Energy Ltd (KCEL). Following the 65% cut in the FIT, it was hoped that new projects could be sought once the price of solar PV came down, but the unexpected changes to the EIS tax benefits for small investors has now made the KCEL business model unviable.

As you know, KCEL is a not-for-profit Social Enterprise that grew out of Transition Marlborough (TM) in order to cut carbon emissions through the installation of renewable energy systems. In the longer term, surplus funds would have been used to alleviate fuel poverty in our town. KCEL is staffed by volunteers who are committed to a cleaner environment and together with other community energy companies in Wiltshire, provided regular work for several local solar PV fitters. KCEL's installations are currently saving at least 62 tonnes of CO2 per annum.

We note that in November 2014, you were delighted to officially open the £60,000 KCEL project, entirely funded by local people, that had installed 200 solar panels on the roof of Devizes School and were impressed by the educational role that it was playing for the students.

We had, therefore, assumed that these small-scale, renewable energy projects had your full support. This was why so many of us wrote to you, as soon as the proposed cut to the FIT was announced, warning of the threat to community energy companies and subsequent job losses. Last October, TH White Ltd., along with 30 Community Energy Groups lobbied you and your colleagues who represent constituencies in the South-West, against cuts to renewable energy subsidies because they would lead to the loss of jobs and local investment. Alex Lockton, general manager at T H White Energy, said “With people like the governor of the Bank of England and the director general of the CBI calling for increased effort around climate change, it makes no sense for the Government to remove support from the solar industry which enjoys support from 80% of the public. Community energy schemes are a fantastic way for people to take action themselves to help secure a cleaner energy future for our country.”

When we wrote to you, in September 2015, expressing our concerns, you justified this action by saying that, “because the extra costs associated with providing the FIT are ultimately paid by customers through their energy bills, it was only right for the government to ensure that these costs are kept affordable”.

However, official emails from early in 2015, recently obtained by Carbon Brief, clearly show that the Government had known that future consumer bills would actually fall, regardless of a cut in the FIT: an average household energy bill would be £1,222 in 2020, some 7% (£97) lower than the £1,319 projection made the previous year. This reduction is largely down to falling fossil fuel prices. With fossil fuels responsible for about half of the UK’s power generation in 2015, the Department for Energy and Climate Change (DECC) now expects wholesale electricity to cost less than 5p per unit in 2020, around 10% lower than it was projecting a year earlier.

As a result of these revelations, Sir Ed Davey, the previous Minister at DECC, has said: “The scandalous lack of openness and transparency on that crucial calculation means the Conservatives are decimating a whole industry, with no convincing hard evidence to justify their decisions.”

In the light of this new information on falling energy costs, do you still standby your Government's decision to cut the FIT by 65% and abolish the EIS? Furthermore, is there any action that you could suggest, which would value the local engagement needed to revive our community energy company and enable it to fund the new installations required to meet the rising demand for clean electricity?

Yours sincerely,

The Transition Marlborough Team: