The legal action comes soon after the government’s announcement it will cut feed in fariffs from 43p per kWh to 21p
A coalition of UK solar companies has initiated legal action against the government in response to its plans to more than halve solar subsidies.
The action focuses on the recent announcement by the Department of Energy and Climate Change (Decc) to cut the rate paid to householders with solar panels under the feed-in tariff from 43p per kWh to 21p, significantly reducing the attractiveness of the technology to customers and investors.
Decc has said that the new rates will apply from 12 December, just six weeks after the announcement was made and before the consultation on the proposed changes closes on 23 December.
The lawyers acting for the solar companies will argue that the 12 December deadline is unlawful on the grounds that it prejudges the consultation process and is being implemented without adherence to the correct procedures. The lawyers will also argue that the deadline is “unreasonable” because of its impact on the industry and on groups which have spent time and money developing projects that will have to be cancelled if they can’t be completed by 12 December.
The action will take the form of a judicial review in the high court. Such actions usually take many months, but the court has agreed to expedite the case given the proximity of the contested December deadline. According to Solarcentury, this means that Decc will have to submits its defence by 21 November. The case could appear in court soon after that date.
Jeremy Leggett, founder of Solarcentury, said: “We expected a proper and fair consultation on the review of Fits. We expected to have the time to plan for the next stage of the development of the market. We were all expecting a new tariff from April 2012. Instead we get a ready-made decision which seriously harms the solar industry and everyone in it and gives us less than six weeks to save the businesses we have built up over multiple years.”
A Decc spokesperson said: “We’re consulting on proposed new tariffs for a reason – to protect consumers from footing the bill for excessive subsidies. This is a live consultation and it will be open for people to comment until 23 December. We can confirm that an application has been made for judicial review of certain aspects of the current consultation, which we shall be defending.”
The solar companies involved in the action hope that the court will quash the government’s decision to cut the rates from 12 December, but they acknowledge that even if this happens the reduced rates would most likely still be enforced within a few months.
John Faulks, company secretary of Solarcentury, said: “It wouldn’t be a massive win. But there’s a wider point of principle here about arbitrary government decisions destroying industry.”
The government also faces a second legal challenge on the same issue from Friends of the Earth (FoE). The group intends to lodge a judicial review early next week if the government doesn’t agree by tomorrow to drop the deadline. Gita Parihar of FoE said that, if the group’s legal action goes ahead, she expects the two claims to be heard in court together.
The pressure on the government over its handling of the Fits review will be stepped up this evening in a speech by the John Cridland, director general of the CBI. Addressing the CBI East Midlands Annual Dinner, Cridland is expected to denounce the dramatic cut in solar feed-in tariffs as “the latest in a string of government own goals”.
Leaders of the solar industry also met the energy minister, Greg Barker, today but came away fuming. “The government needs to be seen to consult on the feed-in tariffs, but it is clear from this meeting this is all a foregone conclusion,” said Daniel Green, chief executive of HomeSun. “Three legal actions against the government are in process. Today’s meeting will stimulate more. This is disastrous and irresponsible decision making by the government. The thinking isn’t joined up.”
He continued: “According to a report from Element Energy to be published in the next few weeks, the Fits cost around £220m yearly but generate £280m in taxes (jobs and VAT). Why cut a programme that is making money and making the green revolution accessible to everyday consumers?”