The Department for Energy and Climate Change has lost its appeal against December’s judicial review, which means it cannot put its feed-in tariff cuts into action until March.
The government will now have to introduce its reduction from the current rate of 43.3p per kilowatt hour, to a 21p rate for solar panel electricity systems on 3 March rather than its original 12 December date.
Friends of the Earth and two renewable energy companies, Solarcentury and HomeSun, lodged the legal challenge to the government after it rushed through the reduced payments to renewable energy producers after it had already commissioned their projects.
The court ruling means that existing producers will continue to receive 43.3p/kWh on the electricity fed into the national grid from solar panels. The Department for Energy and Climate Change (DECC) was ordered to pay the full costs of around £125,000 for the appeal hearing and refused permission to appeal to the Supreme Court.
Now that the government’s actions have been confirmed as illegal, with the courts ruling that it is not entitled to change solar feed-in tariff retrospectively, HomeSun has called for fairer tariff that will benefit homeowners looking to install solar photovoltaics (PV).
Daniel Green, CEO at HomeSun, said: “The Secretary of State has failed to have proper regard for the rights conferred by the feed-in tariff, which aims to encourage homeowners to generate their own energy. Like a Government bond, that rate is fixed depending on the date the installation becomes eligible and Government cannot change it as they choose.”
Mr Green added that “both this appeal and the Judicial Review in The High Court would not have been required had the DECC followed its own process and allowed the industry time to prepare for a lower feed-in tariff.”
The business organisation CBI said that the government’s change in policy on feed-in tariff payments was ‘legally flawed’. John Cridland, CBI director-general, said: “The judgement should be used to draw a line under this saga, which saw the Government scoring a spectacular own goal and confidence in the renewables sector undermined.”
However, the Energy and Climate Change Secretary, Chris Huhne, has refused to accept the decision and is seeking to prolong the case. “We disagree [with the High court ruling] and are seeking permission to appeal to the Supreme Court,” he said, despite the fact that rate changes are being put before parliament that will bring the new 21p rate into effect from 3 March.
Mr Huhne said the decision to reduce the rate was made in order to “maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations.”
Gaynor Hartnell, chief executive at the Renewable Energy Association (REA), said: “The government’s action and the subsequent court case had thrown the solar industry into a state of extreme uncertainty.”