Energy Efficiency and Microgeneration Bill [HL]

My Lords, I, too, should declare an interest at the outset as a past president of Energy Action Scotland. I continue to support that highly respected and very effective organisation. I also congratulate the noble Lord, Lord Redesdale, on promoting this Bill, which I support. I very much hope that it will have a smooth passage through the legislative process. Although the noble Lord did not specifically refer to this in his opening speech, the Bill in my view builds on the Climate Change and Sustainable Energy Act 2006. That excellent piece of legislation was introduced by Mark Lazarowicz in another place in 2005. It enjoyed enthusiastic cross-party support during its consideration, which was widely welcomed as a sign that the Government were serious about the need to ensure that microgeneration makes a contribution to their energy and climate change targets. Microgeneration or micro-power could be described as involving small-scale renewable low-carbon-source energy technologies. It can play an important role in this country’s contribution to combating the effects of climate change. It will increasingly have the additional benefit of reducing the transmission capacity requirement of the national grid and may in the longer term obviate the need for investment in large new power stations. One factor in increasing the proportion of this country’s energy that is generated by renewable sources is convincing people that they, as individuals, can be supporting actors in what is not just a big picture but the all-time blockbuster. Those who attempt to downplay climate change or even, in extreme cases, to deny its very existence—there still are some—are the modern-day flat-earthers. Thankfully, their voices are becoming ever fainter as the evidence against them mounts. The question is not, ““Do we need to act?”” but ““How quickly do we need to act?””. Public opinion in the UK does not ask what the problem is; it asks what we can do to reduce and, ultimately, overcome it. Microgeneration is a realistic means of responding to that question, although much more prosaic actions can be undertaken. Many noble Lords will have seen this week’s full-page newspaper advertisements by the Energy Saving Trust as part of its ““Save your 20 per cent”” campaign, in which it highlighted doing things such as turning off the TV standby and using energy-saving light bulbs and loft insulation. As the noble Lord, Lord Redesdale, rightly said, any family can implement such actions immediately—with, I suppose, the exception in the last case of most flat dwellers. Thereafter, many people genuinely want to do more to directly lower their own carbon output. That is why the encouragement offered by schemes such as the low carbon buildings programme and its Scottish equivalent—the community and household renewables initiative—are so important. Both provide grants for householders and community projects, as well as builders and developers, to support the installation of large microgeneration technologies. These schemes are increasingly successful, but significant barriers remain to be overcome if the uptake of microgeneration and energy efficiency is to be increased. I think that it is fair to say that, historically, the major constraint has concerned a lack of information about the products available, allied to concerns about their quality and reliability and the length of the payback involved. I should be interested to hear the comments of the noble Lord, Lord Redesdale, on payback. I put the question to him, in particular, because he gave the example of his kitchen, but he did not say whether he was to pay back his wife or whether his wife was to pay back him and, if so, whether it was to be a financial transaction. Perhaps he will tell us when he addresses the House again. Payback is an issue in relation to these schemes, but cost cannot be put to one side, not least due to the fact that new products with an initially low demand are often expensive. To that end, the announcement by the Chancellor of the Exchequer in the 2006 Pre-Budget Report that the sale of surplus electricity from installations designed for personal use would not be subject to income tax is much to be welcomed. However, for that to become fully effective, I believe that a third barrier—the lack of suitable meters to record and evaluate micro-producers who may want to export excess power to the grid—must be addressed. A further disincentive has been the requirement for planning permission for some forms of microgeneration. The 2006 Act charged the Government with responsibility for reviewing the current regime concerning planning permission requirements for micro-technologies. I hope that that will be brought to a swift conclusion, followed by the implementation of effective changes. That said, local authorities that have a policy of encouraging such developments can already act in a manner that will facilitate their introduction. As an example, I draw the House’s attention to the City of Edinburgh Council, which wants to encourage its citizens to install solar water heaters and is in the process of making such applications exempt from the permitted development regulations. At present, applying for planning permission can add £300 to £400 to the cost and can mean a delay of several months, neither of which is likely to act as an incentive to householders. I am sure that other local authorities will be seeking their own way to remove such obstacles to the development of microgeneration, but the sooner the Government produce conclusions to their own review, the better. Clause 4 of the Bill refers to the need to facilitate the development of microgeneration on agricultural land, and I can well appreciate the noble Lord’s reason for highlighting this need, particularly as he outlined his own recent experiences. That was not specified in the 2006 Act, and there must be a great deal of scope for utilising microgeneration technologies in the agricultural context in ways that would not just contribute to the overall need to reduce carbon emissions but also provide cheaper and more efficient forms of heat and power in rural areas. There is a tendency by those of us who live in urban areas to assume that anyone who wants a gas supply at their home can have it. But, of course, that is not the case. In fact, it is probably not widely known that around 30 per cent of homes in Scotland are off the mains gas grid and are never likely to be connected to it. I am sure that some rural areas in England will not have access to gas supply either, and I imagine that that will particularly be the case in respect of agricultural land. Quite apart from issues relating to carbon emissions, research undertaken by the Fuel Poverty Advisory Group shows that the most effective measure for removing a household from fuel poverty is to fit a gas central heating system. Where that is impossible, other measures become increasingly important, which is an additional reason why this clause should be welcomed. I am particularly supportive of the clauses that seek to build into legislation measures that will increase awareness of what is termed the ““energy rating”” of a property. Not only will a prospective purchaser of a home who is conscious of energy efficiency have the ability to make a fully informed assessment of the overall quality of the property but the fact that estate agents will be required to bring this important issue to the general attention of all prospective purchasers will be of considerable value. Irrespective of whether they had hitherto placed energy efficiency within their criteria when deciding on the suitability or otherwise of a property for purchase, I believe that the fact that this information is up front in the particulars—as the noble Lord, Lord Redesdale, described it, from the small print to the large print—will reinforce its importance. Earlier this week, the Scottish Parliament somewhat controversially voted to introduce a single seller property survey. This means that the seller of a property will be responsible for producing the information necessary fully to inform potential buyers—a move opposed by the Law Society of Scotland. The kind of information outlined in Clause 1 of this Bill could usefully be included in that Scottish single seller survey. I hope that the passage of this Bill will encourage that to happen, because I firmly believe that such information should increasingly be regarded as essential when a property is being purchased. I also welcome the fact that notices to be displayed by estate agents will be required to make explicit reference to the value of energy efficiency and microgeneration. Fuel poverty is a major issue and, apart from through gas central heating, it can be reduced by the relatively inexpensive use of basic energy efficient practices, such as loft and cavity wall insulation, as has been said. It would be a mistake to assume that fuel poverty affects only the poorest families. The accepted definition of fuel poverty is a household where more than 10 per cent of its income is spent on heating. Home owners often fall within that bracket, particularly at times of high fuel prices, such as we have been subjected to over the past two years. It is self-evident that any measures that people have not previously used to minimise their energy bills have to be of considerable value, and the more that such measures are highlighted, such as those suggested in this Bill, the better. Other clauses in the Bill also serve to emphasise the need for the growing importance of microgeneration technologies to be more widely recognised. One of the main considerations of fitting, say, a small domestic wind turbine is that the price could be in the region of £1,500, not including the cost of the planning application. With even the upper end of estimates for the consequent annual saving on fuel bills unlikely to exceed 10 per cent of that cost, that suggests a considerable payback time—very probably longer than the individual intends to retain ownership of the property. Thus any measure that ensures that an increase in the value of the property consequent on the installation of a microgeneration system does not have the knock-on effect of pushing the council tax payment into the next band is desirable. The noble Lord, Lord Whitty, called it the perverse effect. I very much agree with that and I hope that the Government will find a means of avoiding it so that it does not act as a disincentive. Equally, when a householder wants to introduce some form of micro-power as supplementary energy generation, knowing that there is a ready source of funding to facilitate it will be a considerable comfort. The noble Lord, Lord Redesdale, accorded that a plan for green mortgages—I am attracted to that terminology—but I should have thought it likely that, as the value of the property should increase, most banks or building societies would be willing to provide lending. Clause 5 of the Bill guarantees that, which could play an important part in convincing individuals to proceed with some form of microgeneration. In conclusion, I believe that the Bill deserves to meet with widespread support, and I very much hope that it will. It will enhance the major advances contained in the Climate Change and Sustainable Energy Act and encourage more people to make their own contribution to reducing carbon emissions, tackling fuel poverty and ultimately reducing demands on the national grid. I look forward to the Minister signifying government support for the thrust of this Bill. Once again, I congratulate the noble Lord, Lord Redesdale, on having the foresight to bring it forward.