Energy Minister Greg Barker has tonight said he disagrees with a High Court ruling that the Government's plans to reduce the Feed-in Tariff for solar PV were unlawful.
The Department of Energy and Climate Change has confirmed it will now seek an urgent appeal hearing in an attempt to have today's ruling overturned.
The two-day hearing at London's High Court was told reductions are being hurried in because the Government believes they are too generous and costly in the face of the falling costs of solar technology and the number of people wanting to take advantage of the scheme.
Today Mr Justice Mitting said he was satisfied that the Government’s proposals were already having “a significant impact” on the solar panel industry.
He declared that implementing Mr Huhne’s proposals, as planned, in April next year by referring back to the December 12 deadline, which had fallen in the middle of a consultation period, would be unlawful.
He said the Energy Secretary was entitled to make modifications for “the statutory purpose” of promoting small-scale, low carbon electricity-generating schemes.
But changes made by reference to the earlier date of December 12 “are not in my judgement calculated to further that statutory purpose”.
He added: “On the contrary, they will tend to undermine the confidence of those participating in the market for small solar systems.”
He observed that a significant capital outlay was required to install solar panels, and the payback for that investment under the FITs scheme took place over 25 years.
The judge refused the Energy Secretary permission to appeal against his ruling saying his “prospects of success” were insufficient to justify permission.
The Minister must now ask the Court of Appeal itself to hear his case.
The judge said he would do all that he could to ensure an early hearing in the new year if the appeal judges agreed to hear the case.
This evening, Energy Minister Greg Barker said his department would now seek an appeal to overturn the ruling.
He added: “We disagree with the Court’s decision. We will be seeking an appeal and hope to secure a hearing as soon as possible. Regardless of today’s outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills.”
Friends of the Earth is now urging the Government to come up with a new proposal which would allow solar payments to fall in line with reduced installation costs, while ensuring the solar industry continues to play a key part in developing a cleaner future.
Friends of the Earth’s Executive Director Andy Atkins said: "These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs.
"We hope this ruling will prevent Ministers rushing through damaging changes to clean energy subsidies - giving solar firms a much-needed confidence boost.
“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."
Solarcentury has always argued that the Government needed go though the consultation process properly and only change tariffs at the end of the procedures laid down in statute.
Jeremy Leggett, chairman of fellow court applicant, Solarcentury added: "We encourage the Secretary of State to accept the judge's very clear ruling, not plunge the industry into a further period of uncertainty by considering going to appeal, and to conduct the reminder of the current consultation process properly with constructive conversations with the industry.
“Solarcentury is pleased with the decision, obviously. 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.”
Mr Leggett added: “The whole point of Feed in Tariffs is to build the market. It’s like seed capital. It’s not a hand-out. The support has to be clear, and it should step down gradually according to predictable rules.
“That is the way to use this type of market support and build a viable market. DECC already knows this and I hope they now understand that we cannot work in a market which is subject to whimsical and back-dated decisions. We are still waiting for DECC to publish Phase 2 of the consultation about the management of the FITs scheme.
“Let’s hope DECC do not try and pull another stunt to ambush us yet again.”
HomeSun CEO, Daniel Green, said: “There are so many winners who will benefit from this decision: the solar industry with its 35,000 jobs and 3,000 companies, which may now be saved and continue to contribute over £230 million in tax and PAYE to the Treasury; the British public who have embraced solar like no other energy efficiency technology and it is a win for honesty over illegality.
“The losers here are the big energy companies who don’t want to see homeowners producing their own energy but just want us to pay more and more to them; and also those who appear to be their allies, Chris Huhne and DECC. He has been caught with his hand on the steering wheel of this unlawful action, believing that he can push through legislation at any cost without due consultation and he should not be allowed to pass the blame.
“HomeSun will continue to work on behalf of the British public to free people from unfair and relentless energy price rises.
“This ruling is important not only for the solar industry but for all future government consultations. To have an ‘effective date’ in the middle of a consultation must never happen again because it makes a mockery of the very essence of what a consultation is. By finding this policy illegal, the Judicial Review has stopped a dangerous precedent being set.”
Clare King, a specialist renewable energy lawyer at law firm Osborne Clarke, said: “This is a positive initial message for the UK solar industry, however, the situation is still far from clear and industry players would be wise to sit tight until a new reference date is set.
“Until then the lack of certainty is going to make it difficult for solar companies, homeowners and investors to plan for the future.”
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