Updated: Gov loses solar FITs legal appeal
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It's reported that the government will now take its case to the Supreme Court
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25/01/2012
The government today lost its legal appeal against a High Court decision that ruled the proposed cuts to solar Feed-in Tariff (FiT) rates as “legally flawed.”
The announcement is the latest development in an ongoing saga of consultations and legal action that was sparked by government proposals to half solar FiTs support from 43p/kWh to 21p/kWh with a ‘reference’ date of 12 December - midway through a FiT consultation. The original successful legal challenge against the cuts was made by Solarcentury, Friends of the Earth and HomeSun.
Despite the government's appeal, three High Court judges unanimously decided that the government’s attempt to cut solar Feed-in tariffs from 12 December was unlawful.
Last week the Department of Energy and Climate Change (DECC) announced that if it lost the legal appeal a new date of 3 March will come into effect instead.
This would mean that anyone who registers a project before the 3 March should receive the higher FiT rate of 43.3p/kWh for 25 years. However, anyone who registers their system on or after the 3 March (but before 1 April) will only receive 43.3p/kWh for one month, and then move onto the new rate of 21p/kWh after the 1 April.
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Energy and Climate Change Secretary Chris Huhne confirmed that the government disagrees with the Appeal Court decision asnd is now "seeking permission to appeal to the Supreme Court."
“We have already put before Parliament changes to the regulations that will bring a 21p rate into effect from April for solar pv installations from 3 March to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry.
“We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations. Solar PV can have strong and vibrant future in UK and we want a lasting FITs scheme to support that future and jobs in the industry,” he added.
Reaction
Following the decision, Climate Change Minister Greg Barker tweeted: “#solar, Win, lose or draw today, important we move forward together, drive down costs + step up deployment.”
Reacting to the decision via Twitter, Howard Johns, Solar Trade Association Chairman, questioned Mr Barker’s sentiment by highlighting that the government have already attempted to take their appeal to the Supreme Court, thereby “keeping industry in uncertainty.”
Friends of the Earth's Executive Director Andy Atkins said:
"This landmark judgement confirms that devastating government plans to rush through cuts to solar payments are illegal - and will prevent Ministers from causing industry chaos with similar cuts in future. The government must now take steps to safeguard the UK's solar industry and the 29,000 jobs still facing the chop.
Jeremy Leggett, Chairman, Solarcentury said:
"A historic judgement has been made today, one that should be welcomed by the entire renewable energy industry. Renewables can only play the pivotal role necessary to deliver a new green economy, if we have a stable market and investor confidence backed by lawful, predictable and carefully considered policy. Today we have reminded government that it will be held to account when it acts illegally and tries to push through unlawful policy changes. We would much prefer not to have taken this path but Ministers gave us no choice. Our hope now is that we can work together again to restore the thriving jobs rich solar sector that has been so badly undermined by government actions since October."
Edward de la Billiere of Prospect Law, representing Solarcentury, said:
“A unanimous ruling like this gives the legal certainty investors need before they invest in micro-renewables in the UK. It goes wider than the original challenge, about the 12 December deadline, and makes clear that DECC cannot retrospectively change the rate of the FIT for people who are locked into it. It should give great comfort to everyone from the domestic owner of a system to those investing indirectly in this sector and will I expect attract overseas money into this new and burgeoning industry. This judgment is solid enough to be a good day for business and for Britain’s green energy obligations.”
Juliet Davenport of renewable energy supplier Good Energy tweeted that the credibility of the way the FIT budget is set has been "seriously damaged", adding: "govt must reform FIT to prevent boom & bust happening again".
For the latest reaction via Twitter, click here.
Legal precedent
In a statement to E2B Pulse welcoming the verdict, Dave Sowden, Chief Executive of the Micropower Council, said the decision "establishes a legal precedent that effective retrospective changes to government policy are not permitted".
"Investor confidence has been badly shaken and the focus should now be on restoring stability to the UK solar PV and wider microgeneration sector. Certainty around the future of the Feed-in Tariff scheme will be key for solar PV, as well as other microgeneration technologies to be included under the eagerly awaited Phase 2 consultation, such as micro CHP and micro wind. We must now ensure that we are in a position to reap all the potential economic benefits that the microgeneration sector has to offer and we hope that DECC will make a clarifying statement shortly.”
Read the Micropower Council's full analysis here.
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