As we reported earlier this month, the Department of Energy and Climate Change (DECC) launched an emergency consultation on the level of Feed-in Tariffs (FITs) payable to solar photovoltaic (PV) electricity generators. The consultation on FITs is the second one this year and is notable as while the deadline for responses does not close until today, Friday 23 December, it proposes to halve the FITs payable from 12 December onwards.
The legality of DECC’s emergency consultation was challenged by Friends of the Earth and two solar companies and, on Wednesday, they won the right to take the Government to court over the proposed changes to the FIT regime. High Court judge, Mr Justice Mitting, ruled that DECC has a case to answer after the Department announced it would halve the tariffs for solar PV nearly two weeks before the end of its own consultation period.
While the judgement allows the campaigners to seek judicial review of the consultation, it is only the first stage of a potentially lengthy legal battle and they will need to persuade the court that DECC has acted illegally. Since the decision, DECC has announced its intention to appeal which will only cast further doubt over the level and timing of the FITs projects will obtain under the scheme. In particular, owners of installations commissioned since 12 December will need to wait for DECC’s response to the consultation before they can be sure of the FITs they will receive. The response was originally due in January 2012 but the threat of impending court action may delay the publication or temper the content of the response.
Most commentators suggest that the solar industry now concedes that tariffs should be reduced to reflect falling installation costs and overly generous rates of return to investors. That said, any future changes should be better managed and implemented in cooperation with what remains of the UK’s nascent solar industry.