A number of solar photovoltaic (PV) installation companies have issued a claim to the High Court for £2.2 million compensation from the UK Government following its disastrous handling of cuts to the Feed-in Tariff.
The massive claim is for losses incurred as a result of the attempt by The Department of Energy and Climate Change (DECC) to introduce unlawful cuts to the Feed in Tariff in October last year.
Prospect Law, the legal team that defeated the Government over the cuts, issued DECC with a pre action ‘Letter Before Claim’ in July on behalf of three solar energy companies.
The letter requested that DECC agrees to pay compensation for the losses suffered, but the group was forced to head to the High Court following a letter of response in August in which DECC refused to accept liability and insisted it was not responsible for losses.
A number of other solar companies are expected to join the claim before the end of October, as the court gathers evidence, increasing pressure on DECC to accept responsibility for losses incurred as a result of its illegal policy changes.
Nick Keighley, Founding Director, Solarlec PV Solutions Ltd, one of the companies seeking damages, said: “We are hopeful for the future of the solar, with both the public in support of it and young people determined to be employed the sector, but companies such as ours must be in a healthy condition to create the solar future Britain wants.”
He added: “DECC had every opportunity to stop this issue reaching the courts. All the Department needed to do was accept responsibility and help our businesses recover to deliver at the scale and pace required to meet its own policy objectives.
“The Government simply needs to accept that the losses incurred as a result of its unlawful conduct were very real and caused substantial harm to our firms. One only has to look at the sharp drop in installation numbers to see the impact on consumer confidence.
“Our hope is that consumers will soon realise, once again, what a sound investment solar is. But it will be no thanks to the Government. If it takes the High Court to impress on DECC their responsibility to the industry then so be it.”
A spokesperson from Prospect Law added: “By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry.
“Solar is an industry which the public wants and believes in, but significant damage has been done to the sector. It’s now up to the High Court to call the Government to account for its unlawful actions and the damage which has been suffered by forcing DECC to issue compensation.”
The 2008 Energy Act and the Feed-in tariff effectively provide a set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a “legitimate expectation” under which both the public and the UK solar industry could operate.
But the premature and unlawful cuts, announced by the Minister on 31st October last year, ignored the Government’s own policy framework. The organisations claim the cuts, ruled ‘unlawful and unfair’ by the High Court, Court of Appeal and Supreme Court in Spring 2012, caused substantial damage to their businesses.
The landmark case confirmed that the attempt by DECC to retrospectively change primary legislation was unlawful, and that a consistent legislative framework is vital to encourage long term investment in clean energy from consumers and businesses alike. Specifically, the solar companies saw a drop in consumer confidence, reduction in orders, sales and profit margin as well as the loss of substantial contracts, including ‘free solar’ schemes, virtually overnight.