No legal ruling to FITs cut until next year

Solar firms are set to have to wait until the New Year before a court rules on the legality of the government’s plans to cut subsidies for solar electricity generation from 12 December.

Environmental groups and solar photo-voltaic (solar PV) firms lodged a legal challenge to the government’s 12 December cut-off date for the current solar subsidy last month. Schemes installed after 12 December will receive 21p per kWh for their electricity from next April as opposed to 43p per kWh which will continue to be paid to schemes installed before 12 December.

An initial hearing on the legality of the government’s plans is set to a take place on 15 December, which Building understands will make it highly unlikely that the full case will come to court until the New Year. Though those who lodged the challenge have said they will once again petition the court to hear it earlier.

Solar PV firms and Friends of the Earth have said the consultation is not genuine because the cut-off date falls before the consultation closes on 23 December. They also argue the change, when it is implemented, will be retrospective as a result of this, which it is not allowed to be.

The government however points the date at which the tariff will change, April 2012, to argue that the consultation is genuine and the changes will not be retrospective.

Daniel Green, chief executive of HomeSun, one of the firms to have lodged a legal challenge, said he would have to continue to “right size” his business on the assumption the rate and date of the cuts would stand. “I’m resigned to the time scale but I’m confident that the court will demonstrate that this is entirely illegal,” he said.

Several firms have reported lost revenue and redundancies in the wake of the cut.

Last week, contractor Carillion put 4,500 people at risk of redundancy because of the effect the cut to the tariff has had on its solar PV business, Carillion Energy Services. Breyer group – one of the largest solar contractors - has also issued a warning that its revenue this year will be cut by up to 15% because of the fall-off in the market from the cuts.