High Court rules solar cuts are unlawful

22/12/2011

Companies in the UK could once again benefit from high levels of sustainable business energy subsidy.

The High Court yesterday (December 21st) ruled that government plans to cut Feed-in Tariff levels were "legally flawed", opening the door for a possible judicial review.

If a review takes place, the government may be forced to delay its plans to reduce solar subsidies from 43.3p per kWh to 21p per kWh.

This will allow thousands more businesses to take advantage of higher rates and may encourage companies to adopt sustainable business energy plans.

Currently, many companies have had to abandon or put on hold sustainable projects, as they are unable to cover costs without government aid.

If Feed-in Tariff reductions are placed in line with lowering installation costs, businesses will once again have access to vital funds to install solar technology.

However, the government plans to appeal the High Court decision.

Climate change minister Greg Barker stated: "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 [photovoltaic] are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills."

Despite government claims, two parliamentary select committees are today expected to publish a scathing indictment of the government's handling of Feed-in Tariff reductions, accusing ministers of undermining confidence in green energy policy.

The Energy and Climate Change Committee and the Environmental Audit Committee will criticise the impact of the cuts on the economy, stating that they delivered a "fatal" blow to the solar sector and discouraged vital investment.

Tim Yeo, chairman of the Energy and Climate Change Committee, has said that the government's handling of the changes to Feed-in Tariffs has been clumsy, despite the decision to cut rates being the right one.

Posted by Tom Barnett