Government launches Supreme Court appeal against solar ruling
The government is reportedly poised to lodge a Supreme Court appeal against two court rulings that branded its plans to cut solar incentives as illegal.
Solar firms have been informed the Department of Energy and Climate Change (DECC) will this week submit an application to the Supreme Court in an attempt to ensure it can impose cuts to feed-in tariffs (FiTs) on installations completed after December 12 last year.
At a Court of Appeal ruling last month, three judges said the government would be acting unlawfully by trying to impose retrospective cuts to the solar incentive scheme. They set DECC a deadline of today to request another appeal to the Supreme Court, which the government is now expected to meet.
Solar industry players had hoped the new Secretary of State for Energy and Climate Change, Ed Davey, would reverse his predecessor Chris Huhne's decision to continue with the appeal and today expressed their disappointment at the news.
Daniel Green, chief executive of HomeSun, which is leading legal proceedings against the government, accused Davey of wasting taxapayers' money.
"We are hugely disappointed that Ed Davey is choosing to pursue an expensive lost cause rather than working with the industry to build a successful future for solar," he said.
"Four judges, one at Judicial Review and three in The Court of Appeal, ruled that the government had acted unlawfully in setting a retrospective ‘reference' date for the FiTs cut. We wonder why Ed Davey wants to be a loser. He wasn't the orchestrator of the feed-in tariff fiasco so why does he want it on his CV?"
The government has maintained that any legal costs would be far lower than the subsidies it would have to pay for the next 25 years if the tariff was not reduced as soon as possible.
However, Green said the government has already succeeded in slowing the number of installations, citing new figures that revealed there was a 90 per cent reduction in solar PV installations and capacity during the last nine weeks compared to the nine weeks prior to 12 December 2011.
"[Climate Change Minister] Greg Barker's claim that this 'extra time' could cost £1.5bn has now been proved to be completely unfounded," added Green. "This has now become just a face-saving exercise for DECC paid for by the taxpayer."
The appeal means confusion will continue over the rate of FiT incentives available for solar installations completed between December 12 last year and March 4 this year.
If the appeal is successful the government will be able to revert to its proposed FiT rate of 21p/kWh for solar panels with less than 4kW of capacity, which will then come into effect from April 1 for all installations completed after December 12.
However, if the Supreme Court upholds the decision of the previous two courts and brands the government's consultation as unlawful then the previous 43p/kWh rate will be retained for a full 25 years for all installations completed before March 4.
The confusion over the current feed-in tariff rate has prompted concerns that some solar firms have been misleading customers by suggesting they are guaranteed the higher rate when it could still be subject to a successful appeal.
Meanwhile, solar firms have accused the government of using repeated appeals to undermine demand in the market as a means of protecting the feed-in tariff scheme's budget.
The decision to appeal comes just weeks after the government launched another consultation on the feed-in tariff scheme, setting out plans for further deep cuts to the incentives available to solar installations to come into effect in the summer.
The government maintains the cuts are necessary to protect the scheme's budget and allow the solar sector to grow in a sustainable manner.
However, the solar industry has countered that DECC's own impact assessment shows that the cuts and disruption experienced over the past six months means the sector will contract this year, resulting in significant job losses.
Campaigners are also concerned the government is seeking to impose retrospective changes to the feed-in tariff, and warn that a ruling in favour of the government would allow it to reduce feed-in tariff payments for any renewable installation qualified for the scheme, including existing installations that believed payments were guaranteed for 25 years.
Friends of the Earth executive director Andy Atkins warned that if the government's appeal was successful, it would significantly undermine long-term confidence in the scheme.
"A successful appeal will allow ministers to slash renewable energy subsidies at any time – even for solar panels and wind turbines that have been operating for years," he said.
"This misguided appeal will only add to the cloud of uncertainty hovering over the renewable clean energy industry and the tens of thousands of people it employs."
However, Jeremy Leggett, chairman of Solarcentury, which is also leading legal action against DECC, claimed the government was unlikely to win its appeal.
"We have been expecting this but we hoped that Ed Davey would see sense and not take the appeal," he said. "If we are lucky this is just a cynical exercise to limit the market to 3 March and they will withdraw in a few weeks.
"If not, and they really are serious about a Supreme Court appeal, then the implications for the renewables industry are deeply worrying.
"Fortunately their arguments are weak. They are the same ones unanimously rejected by the Court of Appeal so I wouldn't give them much chance of success."
DECC failed to respond to a request for comment at the time of going to press.
Source: Business Green
