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Solar News 13 Jan 2011: UK Solar PV FITs Court Case Update. We Take The Wrappers OFF!

Filed under: Latest News

Solar PV FIT legal case UK update 13/1/2012. Looking at the assorted news stories, another period of waiting is due for the UK solar PV industry. Here is a collation of information culled from various sources. Many thanks for solar twitterers for bringing them all to my attention.

Solar PV FIT needs review. Who is fighting in the ring and why?

Solar PV battle: state of play. Key quotes from fighters in the ring. Plus from a few gore-splattered spectators

UK solar PV FIT fiasco. Background.

Even when UK’s solar electric PV FIT subsidy was first introduced in 2010 the levels were already much more generous than any subsidy for solar heating panels. By the end of September 2011 solar PV costs-benefits were at least 30% better still and meanwhile the solar heating market had collapsed by 80%.

Stupidly (there is no other word) Government had failed to inch the subsidy down gradually month by month. Now the reaction was nuclear and comedic: fast-breeding solar lemmings all dashing, faster and faster, towards ever-rising, ever-closer, dead-drop cliffs.

Because of this generous rate, about 100,000 homes had solar PV installed by the end of 2011, (there are about 25M homes in UK) thereby demolishing the scheme’s budget. Predictably, the government of the day blamed the previous Labour Government.

An enormous solar PV gold rush in the last 2 months of 2011 was triggered by an announcement about impending cuts. As a result about half of these systems were installed in just 6 weeks at the end of the year. Free market chaos was unleashed: capitalism with no clothes on.

Prices inevitably rocketed briefly as speculators snapped up containers of panels to resell at 50% to 100% profit and installers named their price. Today,  prices have fallen again and many solar PV panel installers have suspiciously clean fingernails.

Legally there was an obvious timing anomaly with the cuts. Last October Government said it was “consulting” on proposals to halve the subsidy people could get unless their panels were installed before 12 December 2011. Not only was this time much sooner than expected, it was also 11 days before the end of the consultation, which obviously made it a into blatant sham-consultation.

Clever city lawyers spotted a spectacular money-earning and green-PR opportunity and quickly hooked some angry green clients. The momentum got unstoppable. Even we offered cash, but nobody took it up. It was already tainted. Of course, soon everything also turned red.

Today the Government and Friends of the Earth and some solar industry heavies are splatteringly locked in court over the legality of the solar PV FIT cuts. While the first round has been won by FoE, who, to drunken cheers and whoops, gave the Government’s Department of Energy and Climate Change (DECC) a bloody nose ,in December, the delays introduced by the subsequent rounds of this contest of pride vs principle, both at any cost, now threaten to eviscerate the whole UK solar industry, not just those in the ring, but those watching as well.

Some possible scenarios following the Solar PV FIT court fight round 1 are:

  • If Government is not granted leave to appeal (ie it loses round 2), theConsultation would be declared unlawful and the cuts would be nullified. Sources in the Court indicate that this is unlikely.
  • If Government wins on appeal, we return, a month or so late, to where we were before legal action began, ie the Government will consider all responses to its consultation proposals, including the proposal that a domestic system (up to 4 kWh) can expect to earn 21p from 1st April 2012.
  • If Government does not win on appeal, then the 43p tariff could remain in place for all registered installations until the Parliamentary process has concluded (expected to be 1st April 2012, possibly earlier).
  • Other gory scenarios, which involve further appeals.

A Court of Appeal spokesperson said today’s hearing “looked likely to go until next week” – further adding to the uncertainty facing the solar industry over the FiT cuts. In fact, due to the time constraints, things are proceeding in parallel. The Department of Energy and Climate Change’s appeal against the High Court ruling is being heard by the Court of Appeal, even though “leave to appeal” hasn’t yet been formerly granted. And the “roll-up hearing” now looks set to go on into next week, possibly without a final judgement being made for several days, according to a Court of Appeal spokesperson.

And the solar PV FIT headbangers. Who says what? (Do they slur their speech?)

Solar industry response. Friends of the Earth and its court action allies Solarcentury and Homesun, who won December High Court ruling (round 1) against the DECC, said DECC was prolonging industry uncertainty and threatening jobs by fighting on in court.The UK Solar Trade Association say: “The crippling uncertainty over the future of the UK’s solar incentive scheme is set to continue, after three court of appeal judges failed to reach a conclusion on whether or not the government’s proposed changes to the feed-in tariff scheme were unlawful.

It had been hoped that the judges would rule today on whether to hear a government appeal against a previous High Court ruling that branded proposed cuts to feed-in tariff incentives as illegal, on the grounds that they would come into effect before the end of an official consultation period on the proposed changes.”

However, the judges failed to reach a verdict on whether or not the appeal should be allowed to proceed, ending hopes that a final ruling could be reached today.They stated that they hope to make a decision as soon as possible in order to provide the industry with certainty over the future of the incentive scheme. But they argued that it was “rather optimistic” to think a decision could be reached before the end of next week.

The delay is likely to receive a furious response from solar firms who are increasingly desperate for the court and the government to provide clarity on when anticipated cuts to feed-in tariffs will come into effect.

Currently it is unclear what level of support new installations can expect – a scenario that has resulted in a month-long hiatus in new installations.

Friends of the Earth, who launched the case against the government’s consultation alongside a number of solar firms and green consultancies, reiterated its calls for government to ditch its appeal and lay legislation before parliament that would allow it to cut feed-in tariff incentives in a legal manner from the end of February.

Tweeting today the, head of campaigns at FoE, Craig Bennett, said: “Chris Huhne could end uncertainty by tabling regs in Parliament to bring FIT down at end Feb in lawful rather than unlawful way.”

“This appeal will only add to the cloud of uncertainty hanging over the solar industry,” Friends of the Earth’s executive director Andy Atkins said.

Gaynor Hartnell, chief executive of the Renewable Energy Association, who is not known for stridency, condemned the “cavalier” way in which she said DECC has handled the solar PV feed-in tariff.

“No one liked the way the government handled this consultation… Whatever the outcome of the appeal, the court case should ensure that government thinks twice about acting in such a cavalier manner again.”

She also called for lower feed-in tariff rates to be set as soon as possible to stabilise UK’s solar PV industry.

“Having said that, the majority of our members want to draw a line under this affair, look forwards, and get on with installing systems at the new tariff rates.”

This is what a DECC spokesperson said on FITs case.

“The Court of Appeal has not yet decided whether to give permission for an appeal or made a judgement on the FITs case. The Court will wrap up the decision on permission for an appeal and a possible judgement if an appeal is allowed in the next few weeks. Once the outcome is known we will consider our options and make an announcement on the way forward to provide clarity to consumers and industry.” Explaining its grounds for appeal, DECC said it disagreed with the High Court (Round 1) decision on several counts: “The overriding aim of the proposed reduction in tariffs for solar PV (as set out in the recent consultation) is to ensure that over the long term as many people as possible are encouraged to install small scale low-carbon generation (including other technologies as well as solar PV) and benefit from the funding available for the FIT scheme,” DECC said in a statement. “Without an urgent reduction in the current tariffs, which give a very generous return, the budget for the scheme would be severely depleted and there would be very little available for future solar PV generators, or for other technologies. Our view is that the urgent steps we have proposed to protect the scheme for the future are fully consistent with the scheme’s statutory purpose. “We have also made the point that the judicial review was premature as no decision has yet been taken, and a decision will only be taken after a full analysis of the responses to the consultation.” Rather than accept initial defeat, DECC chose to appeal via the Court of Appeal after the High Court ruled that the DECC’s proposals to cut the FiT subsidy for solar electricity by half by December 12 was already having “a significant impact” on the solar panel industry, while its proposals to backdate cuts from April 2012 to December 12 2011, which had fallen in the middle of a consultation period, would be unlawful. A DECC spokesperson said blandly that the Government was doing everything it could to restore clarity and certainty.

(I have concatenated all their jumbly paragraphs into huge one for the above DECC bit because I think that it helps to make it long and boring and suitably less readable because I was a civil servant once and I used to have to get three signatures from up the hierarchy if I ever wanted to host a meeting with tea and chocolate biscuits because the chocolate was the problem and oh dear whoops now I have made a technical breach of the Official Secrets Act by disclosing this to you and now I’ll try briefly to be sorry…)

John Faulks, General Counsel, Solarcentury: “The stakes have increased massively today. All we did was take a narrow challenge that DECC had no power to introduce a 12th December cut off date which took effect before the end of the consultation period a 40 day parliamentary procedure. The Secretary of State’s defence is seriously worrying. He thinks he has the power to do whatever he likes to FITs whenever he likes. And that means no FITs are safe for any technology installed at any time.

We will be awaiting a judgement for at least a week, and hope for the sake of all stakeholders in our renewable energy future, investors, consumers and the general public that we win this case to secure the robust, secure Feed-in tariff we need to drive our low carbon future. DECC have it within their power to remove the uncertainty immediately.

Clare King, a renewable energy lawyer at Osborne Clarke, said: “This is a frustrating result for many companies in the solar PV industry who were hoping for some clarity today. The judges clearly understand the need to get this issue resolved and have said that they will try to get the decision out by 9 February. In the meantime, all companies and investors can do is sit tight and wait.”

Barry Johnston, MD of Solar Twin Ltd commented today: There now seems to be more wisdom in one small carton of takeway chilli noodles than in those two contestants put together. But the wisdom of hindshight is always plentiful. I want that – today.”


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