Fire NIMBYs into the Sun

It has been reported that Liz Truss and the environment secretary, Ranil Jayawardena are going to end the distinction between 3A and 3B farmland— effectively banning solar panels from 58% of farmland in the UK. For someone who models herself on ‘growth growth growth’, this decision can only be described as bizarre. 

There are several reasons why this policy is damaging to the UK’s growth prospects. When left to the free market, the decision between the use of farmland for solar or agriculture comes down to which option provides the farmer with greater profit. By removing this choice, the government is introducing inefficiencies. In some circumstances, farmers are forced into the choice which provides a lower return. Ultimately, this means the decision to effectively ban solar has a net negative impact on the productive capacity of the UK economy. 

In the recent Mini Budget the most expensive policy was by far the ‘Energy Price Guarantee’, which in extreme scenarios could cost up to £140 billion. This works by capping the unit price consumers have to pay, while the government covers the difference. As such, a decrease in the market price of energy could have a significant impact on the price of the EPG and as a result the overall affordability of the Government’s (not so mini) mini budget. 

With demand for energy likely to rise through the winter months and uncertainty about the situation in 2023, any boost to supply (putting downward pressure on the price of energy) could be a saving grace for the Government. Solar is quick to build, generally only taking a few months, and by some estimates is nine times cheaper than gas, although that figure is slightly inflated due to government price guarantees. Unlocking investment into solar energy should be near the top of the Government's priority list. 

The cost of this policy suggestion goes further than the economics though. The Conservative Government committed to a fully decarbonised power sector by 2035 - requiring significant investment to replace the energy currently coming from gas, and other low carbon energy sources. 

However it was estimated by the Financial Times that this policy would threaten £20 billion in investment from the private sector, corresponding with lost production of 30 GW of solar energy which could have reduced carbon emissions by 12 million tonnes. This is incredibly damaging to the environmental goals set by the Government as their initial forecast of a 5 fold increase to 70 GW now appears unlikely. 

The policy also poses significant threats to the UK’s energy security. It was estimated by the Carbon Brief that 5 GW of new domestic energy supply could mean that the Government could cut UK gas imports by 2%. When adjusted to the 30 GW which is currently at risk, the UK could therefore cut gas imports by 12%.

So why does Liz Truss and the current Conservative Government wish to do this? The official line is that it would protect the UK’s food security. But 80% of the UK's food is already imported. It is estimated that even if solar is scaled up in line with the Government’s net zero target, it would still only cover 0.3% of the UK's land area, or 0.5% of farmland, less than the amount of land used for golf courses. 

Solar panels can also be used simultaneously with agricultural practices creating agrivoltaic systems: shade provided by the panels can contribute to create a kind of microclimate, resulting in lower water requirements due to protection from evaporation, as such helping protect farmland from the biggest threat - climate change. Such systems have seen great success in Japan where there are nearly 2,000, growing more than 120 different types of crops. All things considered the Government's reasoning seems questionable at best and a tactical misdirection at worst. 

So why else would the Tories decide to ‘effectively ban’ solar panels across much of the British farmland? The problem is that a lot of the public find them unsightly: particularly older generations, who vote at higher rates and, more importantly, vote Conservative at higher rates. So this, as it often does, boils down to politics trumping economics. The Government is making decisions to try to appease their core voting base rather than taking decisions which are the best for the UK’s future energy security and economy. How pleased will pensioners be if they can't heat their homes because energy supply was curtailed in the name of pretty fields ?

The Conservatives need to to throw out the silly notion that policy decisions should be based on trying to protect specific voter bases, and instead focus on trying to make economically sound decisions that benefit us all in the long-run.