Supreme Court ruling on solar will cost £700m

Fresh fears for the future of the solar power feed-in tariff have emerged after the Supreme Court refused to hear the government’s appeal over its plans to cut the subsidy.

The decision by the Supreme Court last week means the government will now need to find an extra £700m over the next 25 years to meet its commitments under the scheme.

The government announced plans to cut the feed-in tariff (FIT) for installations made after 12 December 2011 in October last year.

However, its consultation on the decision did not close until 23 December, which allowed Friends of the Earth and solar firms to successfully appeal to a High Court judge to strike down the cut-off date as retrospective and illegal.

The Department for Energy and Climate Change subsequently applied to appeal the ruling at the Court of Appeal but that court denied it permission and upheld the High Court’s decision.

Now the Supreme Court has also refused to hear the case.

Since the case started the government has passed legislation making 3 March the date for the cut. But it estimated that allowing the cut to take effect from this date, rather than 12 December, would cost an extra £700m over the 25-year life of the FIT.

While many in the solar industry welcomed the certainty the decision brought, some fear the additional costs may threaten the future of the scheme.

Paul Barwell, chief executive of the Solar Trade Association, said: “The extra money DECC will now have to commit leaves us with serious concerns about the remaining FIT budget, which remains constrained.”

David Symons, director at consultant WSP’s Environment and Energy division, added: “It has given all the wrong messages to the industry about how serious the government is.”