Latest News 25/01/2012
Government cut to solar tariffs blocked as appeal fails
The government has failed in an appeal against a decision which blocked its attempts to reduce solar subsidies.
The court case involved the government's move to halve the payments made to households with solar panels, which it says are unsustainable.
Solar businesses and campaigners had warned thousands of jobs could be lost as a result of the move.
Under the feed-in tariffs programme, people in Britain with solar panels are paid for the electricity they generate.
The decision will lead to widespread confusion over what the tariff level is.
The previous tariff was just over 43p per Kilowatt-hour generated.
The new tariff of 21p per kilowatt-hour had been expected to come into effect from 1 April.
But in October, the government said the reduced rate would be paid to anyone who installed their solar panels after 12 December, sparking anger from environmental groups and installers.
The government announced a consultation on the proposals, which closed on 23 December - 11 days after the decision was to have been implemented.
The High Court ruled that changing the tariffs in this way was "legally flawed", a ruling the Court of Appeal has now upheld.
The change had particularly upset industry as it affected projects which may already have been commissioned but not installed.
"This decision has very important implications for the whole renewable energy sector in the UK," said Ben Warren a partner at Ernst and Young.
"It is a clear message that retrospective adjustment of support is not acceptable,"
The government has put a contingency plan in place which would see the current tariff, of 43p, remain in place until the start of March.
However, they are also considering appealing in the Supreme Court against the latest ruling, potentially allowing them to return to the cut-off date of 12 December.
A DECC spokesperson said: "The Court of Appeal has upheld the High Court ruling on FITs. We are now considering our options."
They added that it meant there were "no guarantees" on any tariff consumers were offered after 12 December.
The tariff for surplus electricity exported to the national grid remains 3.1p per kilowatt-hour paid in addition to the tariff, and is unaffected by the changes.
Feed-in Tariff Update
“I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge. ”
DECC has today laid before Parliament draft licence modifications which, subject to the Parliamentary process set out in the Energy Act 2008, makes provision for a reduced tariff rate (from 1 April 2012 onwards) for new solar PV installations with an eligibility date on or after 3 March 2012 under the Feed – in Tariffs scheme (FITs).
Energy and Climate Change Minister Greg Barker said:
“I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge.
“We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole Feed-in Tariff budget. We’re appealing against the court ruling that’s challenged our proposal for a December reference date. This remains our aim, and we are waiting for the judgment of the Court of Appeal. But this is too important for us to sit and do nothing while we wait. Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March.
“However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date. In the circumstances we believe this gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved.”
Further information on the Government’s response to this aspect of the FITs consultation, together with a summary of the relevant consultation responses, is also being published today on the Department of Energy and Climate Change’s website.
The consultation closed on 23 December 2011 and over 2,000 consultation responses were received which we have been analysing carefully. We are intending to announce the outcome of the consultation by 9 February 2012, in time for any resulting legislative changes to come into effect from 1 April 2012. Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation.
Statement by DECC spokesperson on FITs case
13 January 2012
"The Court of Appeal has not yet decided whether to give permission for an appeal or made a judgement on the FITs case. The Court will wrap up the decision on permission for an appeal and a possible judgement if an appeal is allowed in the next few weeks. Once the outcome is known we will consider our options and make an announcement on the way forward to provide clarity to consumers and industry."
Breaking News: High Court rules that Government FiT cuts are “legally flawed”
High Court rules that Government FiT cuts are “legally flawed”
Friends of the Earth, Homesun and Solarcentury’s appeal to the High Court over the Government’s handling of the feed-in tariff has ended in victory, as Mr Justice Mitting upheld the legal challenge, stating that it was “legally flawed”.
The court agreed that proposals to cut feed-in tariff payments for any solar scheme completed after December 12 - 11 days before the official consultation closed - were unlawful.
The judge’s ruling allows a judicial review to be enacted that could force the Government to relaunch its consultation on feed-in tariffs. The group’s lawyers have moved to remove the Government’s proposals to slash the feed-in tariff rate afforded to solar PV installations after December 12, which was slashed by more than 50 percent.
Lawyers representing the Department for Energy and Climate Change have been refused permission to appeal the decision.
In light of the ruling, Friends of the Earth has called on the Government to allocate more money for solar installations, paid for by the revenue the industry raises for the Treasury, the removal of planned restrictions that would prevent poorer households from installing solar panels and more support for community-owned schemes.
Friends of the Earth’s Executive Director Andy Atkins said: “Ministers must now come up with a sensible plan that protects the UK's solar industry and allows cash-strapped homes and businesses to free themselves from expensive fossil fuels by plugging into clean energy.
"Solar payments should fall in line with falling installation costs but the speed of the Government's proposals threatened to devastate the entire industry."
Chairman of Solarcentury, Jeremy Leggett commented: "The Court has stopped Government abusing its power but it doesn't make up for the fact that DECC has created chaos for the renewable energy industry as a whole, and not just solar.
“Solarcentury was very reluctant to take this legal challenge but DECC gave us no choice. All of this could have been avoided if DECC had done a proper consultation last summer, as they promised, and engaged constructively with the solar industry. I do hope that DECC will now engage properly with the industry, so that together we can build a viable solar industry in the UK, as they have in Germany."
The result of the hearing will be greeted with mixed emotions throughout the industry. Many believe that the Government’s actions have thrown the small-scale solar industry into a state of huge economic uncertainty with the proposals. However, members of the industry are concerned about the ramifications of the victory, which is feared, could damage the industry in the long run.
As Solar Power Portal revealed earlier this week, the incredible installation figures posted by the solar industry in the run up to December 12 could prove catastrophic to the industry. If the Government is forced to honour installations at the previous 43.3p/kWh rate, then the budget set aside for the feed-in tariff scheme would be consumed entirely (it is predicted that almost 90 percent of the 4 year budget is already consumed). If the budget is completely exhausted the Government would be able to act under emergency review and shut down the feed-in tariff scheme.