Shivers are shaking UK’s once sunshiney solar industry. Increasingly, tweeters are opining that 21p (rather than a reversion to 43.3p) is better for everyone because it will prevent a gold rush and excessive depletion of a limited subsidy budget. Anyway’ here’s our take on the story:

On Wednesday January 25, Some time after 10 am, UK’s Court of Appeal will reveal its decision on whether to allow the Government’s legal bid to overturn a ruling that its cuts to the Feed-in Tariff was unlawful.

Their ruling will come a week after the Department of Energy and Climate Change give a contingency date of March 3 for the retrospective introduction of the revised 21p tariff rate as a Plan B, should its appeal fail.

Friends of the Earth told one of UK’s leading environmental news sites ClickGreen: “Our solicitors were informed late on Friday evening that a decision would be delivered next Wednesday, we have been told no further hearing will be held.”

The timing is awful for several reasons.

First of all, the day before, (Tuesday) the Cabinet Minister responsible for FITs, Chris Huhne will have an awful day in court because knows that the Crown Prosecution Service is expecting to receive evidence on allegations he escaped a driving license “points-ban” by transferring speeding “penalty-points” to the driving licence of his wife Vicky Pryce, from whom he is now estranged.

So Chris Huhne might have to resign, leaving DECC and the UK solar industry in a serious headless chicken situation. Not a sunny outlook for UK renewables. If he, er, taxis off into the sunset, then business Minister Edward Davey is currently the top candidate to, er, take the wheel, at DECC. New faces tend to mean new delays.

Second, what happens the next day, Wednesday? Even if Chris Huhne is still in his job,there are several FIT cuts legalities scenarios.

First of all, there is the question of whether DECC actually gets permission to appeal at all. The point is that the judges are deciding on two things at the same time – whether the Government has the right to bring the appeal, and if they are allowed to do so, and only if they are allowed to do so, whether the appeal is upheld.

DECC’s right of appeal.

If DECC does NOT get a right of appeal, the it can NOT go to a higher court, the Supreme Court, and so FoE’s win stands, their battles, and their war is won and the solar industry reverts to 43.3p chaos for 5.5 weeks.

 DECC’s appeal.

If DECC does get a right of appeal, then there there are two outcomes, A and B below.

Outcome A is that the Government wins. This could mean instant reversion to the original solar PV cuts timetable. Maybe not too awful an outcome, apart from giving FoE a bloody nose, but in terms of commonsense, this outcome seems unlikely to happen, in my view. But ye lawe of ye lande moves in mysterious ways…

But it might not mean certainty at all, because, of course FoE might appeal to the Supreme Court! More time and money…

Outcome B is that FoE win and DECC lose the appeal. Then whichever loser is the DECC minister has to decide whether to fight on, ie to the Supreme Court. If preservation of dignity and the FITs funding pot are a priority, DECC  are likely to adopt this “grinding through the courts” strategy, and will seek to do so as slowly as possible. Winning would be secondary to the need to grind on and to close the potential 5.5 week 43.3p gap which closes on 3 March. DECC’s supposed position of principle (ha!) in having another appeal would be that of “generically clarifying the government’s right to impose retrospective dates in consultations, in all departments, not just DECC”. Of course the real issue would be stopping the funding pot from being raided by 43.4p solar subsidy enthusiasts, who will make loadasmoney. A third vanity-type factor would be to clear the name of DECC and its minister from acting unlawfully.

A DECC appeal to the Supreme Court would obviously delay time before we all  finally find out whether the time period of 12/12/2011 – 31/3/2012 was funded at 21p or 43p – because the Plan B cut to 21p could go ahead on 3rd March anyway.

Outcome B now has an official Government contingency Plan B in place, because since last week there has been a new March 3 “contingency date” in an attempt to provide clarity and certainty for the solar industry They have done this by tabling regulations in Parliament that will lead to a reduction to 21p on 3rd March.  They have also pointed out that this is a Plan B which will is designed to fix the date of the rate reductions should the Appeal Court find against them.

After 1 April, what then? There is still no guarantee that the 21p tariff will not be cut further in April or shortly afterwards.

Proposals for the longer term way in which FITs operates (presumably aiming to prevent future bubbles and to spread the finds out more evenly) are expected to be released soon after the court judgement. On the cards are more regular and smaller tariff revisions and perhaps a “volume digression trigger” as is used in Germany.

Meanwhile at least we know that the solar PV FIT subsidy rate for installations registered between 12/12/2011 and 31/3/2012 will be at least 21p per kWh.
Dazzled by jargon? Well, more about Plan B is here. The Businessgreen article on the solar PV FIT court case is here.