23:49 Jesse Norman (Conservative)

On 6 June 2013, in response to a question from the hon. Member for Wells (Tessa Munt), the Secretary of State for Energy and Climate Change said that he hoped that his Department would look into the matter. On 6 September 2013, however, a written question from me received a reply from the Department stating that it was not investigating the matter and that it was for Ofgem, which administers the scheme, and its licensed suppliers to determine eligibility for feed-in tariffs based on the legislation.

On 3 October I received a letter from Ofgem that disavowed responsibility, stating that it did not set the policy underpinning the feed-in tariffs scheme, which was the responsibility of the Department of Energy and Climate Change. The letters also said that the Big Lottery Fund grants were classified as “grants from public funds”, as the national lottery and the apparatus through which it distributes funding were established by statute. As a result, Big Lottery Fund grants were subject to the rules on state aid and it was not possible to combine a grant with the receipt of feed-in tariffs.

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23:56 The Minister of State, Department of Energy and Climate Change (Michael Fallon)

I thank my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for calling for this debate, and for persisting with it after an earlier attempt. This is a topic that the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), would normally handle, but he is abroad tonight. I hope that my hon. Friend will forgive me if I stand in for him.

I regret the position that Moccas, Clifford and other community groups have found themselves in. The Department of Energy and Climate Change, Ofgem and the lottery have done their best to try to rectify the situation, but there is a limit to what can be done within policy and legal constraints. Let me explain the context, and set out the actions that we have taken and the measures that we have introduced to assist local communities that wish to develop renewable energy projects.

National lottery funding and grants issued by or on behalf of the national lottery are considered grants from public funds; I take my hon. Friend’s point about the lottery itself, but grants from it, including from the Awards for All programme and the community sustainable energy programme, are considered grants from public funds. As such, an installation cannot receive feed-in tariff support where national lottery funding has been accepted in support of purchasing and/or installing. I am sure my hon. Friend will accept that it is difficult to justify giving a double subsidy to individuals and organisations at any time, but particularly in the current fiscal climate, by allowing grants from public funds to be used in addition to the feed-in tariff subsidy.

The Government recognise that some communities believed that it was possible to combine lottery Awards for All grants with feed-in tariffs when installing renewable energy systems on their premises, so we have been working with Ofgem and the lottery to try to find an acceptable solution for all sides. Recipients of lottery Awards for All grants who were also claiming feed-in tariffs were given the one-off option of repaying their grant to the lottery or converting it to a loan. The latter means that the income from feed-in tariffs could be used to pay back the loan over time. If the recipient did not take up one of the two options by 20 September, they faced being suspended from the feed-in tariff scheme and having their payments stopped. I understand that both Moccas and Clifford, along with a number of other community groups, have taken up the option to convert their lottery grant into a loan.

My hon. Friend asked a series of other questions. If I may, I will respond to him in detail in writing. Let me conclude by outlining some of the other measures that the Government are taking to support community renewable energy. My hon. Friend and those in his constituency who have already gone down this path are fully aware that our transformation to a low-carbon economy requires a huge national shift in the way we generate, distribute and buy our energy. By investing in local energy projects, communities can generate a healthy and stable return to cover the costs of installing small-scale renewable or low-carbon technologies. Such an opportunity can help drive local growth, redevelopment and even jobs at the larger scale.

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