Government FITs cut 'unlawful'

The government’s decision to cut feed-in tariff rates from 43p to 21p per kWh has been ruled unlawful by a High Court Judge.

The government, which issued a consultation on the change in October, has already said it will seek to appeal the decision, and has been given leave to lodge an appeal by 4 January 2012.

Handing down his judgement this afternoon, Justice Mitting said the decision by the government to reduce the tariff as of 12 December, 11 days before the consultation is due to close, was unlawful.

He said the ruling was a “black and white decision.”

Mitting also speculated that the secretary of state Chris Huhne had no power to make directions to the rate of the feed-in tariff under the Energy Act 2008 that could undermine intentions to open up the market. “Changes made by reference to a date earlier than the date of implentation [of the tariff] are not in my judgement calculated to further the purpose [of encouraging small scale solar installations]. In fact they will undermine confidence in the establishing of small scale solar systems.”

It is not yet clear what immediate impact the decision will have on consumers installing solar photo voltaic panels today.

These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs

Environmental charity Friends of the Earth, which brought the action alongside solar PV firms, immediately called for the government to change track and come up with a new proposal which would allow solar payments to fall in line with reduced installation costs.

Campaigners claim the government’s decision has already cost thousands of jobs in the solar PV industry, with contractor Carillion citing the change of policy as the main reason for putting 4,500 staff on notice at the end of November. Contractor Mears also wrote off £5m it had invested in growing a solar PV installations business.

Andy Atkins, Friends of the Earth’s executive director, 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.”

Energy minister Greg Barker said: “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 electricity are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills.”