Govt shamed over solar incentives after high court defeat

Thursday, 22 December 2011 10:50 AM

By Alex Stevenson Follow @alex__stevenson

MPs have poured scorn on the government's "clumsy" handling of their incentives for solar energy installations, one day after the high court ruled ministers' approach unlawful.

Mr Justice Mitting found the decision to slash feed-in tariffs (FiT) several months early, before a consultation on the issue ended, was "legally flawed". His ruling paves the way for a judicial review in the new year.

Tens of thousands of applications from individuals, community groups, local authorities and farmers were received after the government offered a deliberately generous 43.3p FiT in 2010.

In October this year the Department for Energy and Climate Change announced it would be slashing the FiT to just 21p from December 12th, prompting a rush to get solar photovoltaic (PV) systems set up in time.

MPs on the environmental audit committee and the energy and climate change committee attacked ministers' "panicked changes" without adequate notice to consumers and installers.

Its report suggested homeowners would have to spend £14,000, an increase of £5,600, as a result of the changes, stopping nine out of ten changes.

Solar PV is now expected to be restricted only to wealthier households and could have a "fatal" impact on the industry as a result.

"The consequence of the rushed, 11th-hour consultation will be uncertainty among investors in all kinds of renewable energy, which will inevitably push up the cost of capital," environmental audit committee chair Tim Yeo said.

Energy and climate change committee chair Joan Walley added: "It doesn't make economic sense to let the sun go down on the solar industry in the UK.

"As well as helping to cut carbon emissions, every panel that is installed brings in VAT for the government and every company that benefits from the support is keeping people in work."

Campaigners received a boost after yesterday's high court ruling, which followed a legal challenge by Friends of the Earth and two solar firms, Solarcentury and HomeSun.

"These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs," Friends of the Earth's executive director Andy Atkins said.

"We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies - giving solar firms a much-needed confidence boost."

The celebrations of campaigners may be premature, however.

"The likelihood is that the ruling has simply delayed the inevitable," David Symons of the WSP Environment & Energy consultancy told the Financial Times newspaper.

Climate change minister Greg Barker said the government disagreed with the court's decision and would seek an appeal.

"Regardless of today’s outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills," he said in a statement.

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• climate change
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• environment
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• greg barker
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• solar power