The Court of Appeal has today (25 January) decided that the Government's plan to back-date the cut in fed-in tariff to 12 December for solar energy installations is illegal, although the threat of it has already had a major impact on the industry supplying and installing the panels. The cut has only been delayed to 3 March.
Chris Huhne, Secretary of State for Energy and Climate Change, said: “We want 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. Solar PV can have a strong and vibrant future in the UK and we want a lasting FITs scheme to support that future and jobs in the industry.”
The Government announced in October that it would be cutting the feed-in tariff from April, back-dated to 12 December – a date that preceded the end of the consultation period on the proposal.
The Court has denied the Government permission to appeal further, but the Government seems determined to continue to fight the decision.
The Government's Department of Energy & Climate Change (DECC) had already anticipated the Court's decision by laying before Parliament on 19 January draft licence modifications to introduce the cuts on schemes installed after 3 March and not 12 December.
The cut in the rate is still being introduced in April, as planned, but if the Government's next moves are not successful the back-dated start that was originally 12 December will be 3 March.
The Government’s decision to back-date the cut in the electricity feed-in tariff rate to a point before the consultation period ended was ruled illegal by a High Court judge on 21 December. The Government appealed against that decision, but in case its appeal was unsuccessful created the fall-back position to implement the new rate on photovoltaic (PV) cells installed after 3 March.
The Government announced the cut in feed-in tariff rates for PV cells from 43p to 21p/kWh in October.
Energy & Climate Change Minister Greg Barker said when the draft licence modifications were laid before Parliament on 19 January: “We’re appealing against the court ruling that’s challenged our proposal for a December reference date… But this is too important for us to sit and do nothing while we wait. Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March."
The consultation period closed on 23 December, with more than 2,000 responses received. The Minister said on 19 January that they were being analysed carefully before the Government goes ahead with the tariff cut."We are intending to announce the outcome of the consultation by 9 February, in time for any resulting legislative changes to come into effect from 1 April 2012. Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of further consultation."
Written ministerial statement by Chris Huhne on Feed-in Tariffs (26 January 2012)
As the House will be aware, the Government’s proposed changes to the Feed-in Tariffs (FITs) scheme are the subject of a judicial review. Specifically, the Government has been challenged regarding its proposal to apply new tariffs for solar photovoltaics (PV) from 1 April 2012 to all new installations with an eligibility date on or after an earlier “reference date”, which we proposed should be 12 December 2011.
Yesterday, the Court of Appeal handed down a negative judgment on the Government’s appeal against an earlier decision by the High Court. We respectfully disagree with the judgment and are seeking permission to appeal to the Supreme Court. In the light of that, we cannot rule out the possibility that lower tariffs could be applied to installations which became eligible for FITs on or after the proposed reference date. It is important that consumers are aware of this.
The reason for appealing is that we want to maximise the number of installations that are possible within the available budget for FITs, rather than use available money to pay a higher tariff to half the number of installations. Solar PV can have strong and vibrant future in UK and we want a lasting FITs scheme to support that future and jobs in the industry.
We have already put before Parliament draft licence modifications that (subject to the Parliamentary process) would bring a 21p rate into effect from April for solar PV installations which become eligible for FITs on or after 3 March, to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry.
In the meantime, we want as far as possible to minimise the uncertainty for PV and other technologies eligible for support under FITs. We are therefore still intending to publish the phase 2 consultation by 9 February. This will include proposed tariffs for other FITs technologies and a set of reform proposals for the scheme. We are also intending to publish the Government’s response to the other aspects of the phase 1 consultation that are not affected by the Judicial Review (namely the proposals on energy efficiency and for multi-installation tariff rates).