Solar firms call for High Court case to be dropped to end uncertainty around rates for customers

The solar industry is split on whether continuing a legal battle over government plans to slash solar electricity subsidies is worth the uncertainty it is causing the industry.

Many solar firms have complained about the uncertainty caused by the appeal by Friends of the Earth and solar companies against the government’s move to slash the feed-in tariff (FIT). They argue that they cannot tell customers what rate they will get, making it difficult to sell their products and services.

Reza Shaybani, chairman of the British Photovoltaic Association (BPVA), which represents solar electricity panel manufacturers and installers, said: “In a way they [the firms that brought legal action against the government] are shooting themselves and the industry in the foot. If the budget runs out then we have no industry.”

Shaybani said the case should be dropped by the solar companies and Friends of the Earth to allow the industry to continue in the certainty that installations completed between now and April would get the lower rate.

The BPVA also made a submission to the court in support of the government’s case.

However, Seb Berry, head of public affairs at Solar Century, one of the firms which brought the action, said: “We refute the suggestion that this is a trivial case and could be dropped. The stakes are extremely high. It’s about the future stability of all government renewable schemes.”

Berry said Solar Century would be resigning its membership of the BPVA because it viewed its position as not in the industry’s interest.

The government has been consulting on plans to slash the FIT for solar electricity from 43p per kWh to 21p per kWh for installations completed after 12 December. The changes would take effect from 1 April.

The consultation was declared illegal by the High Court on 21 December after a case was brought by solar companies and Friends of the Earth. The judge ruled that ending eligibility for the higher rate on a date before the consultation ended was illegal.

The government is now seeking to appeal that decision and last Friday the Court of Appeal heard arguments from both the government and the solar industry.

What’s the legal situation?

The law states that installations made today get the current FIT rate at 43p per kWh. If the government’s plans come into effect this will drop to 21p per kWh. Despite hearing arguments from both sides last Friday, the Court of Appeal has not officially given the government permission to appeal and is expected to deliver its decision on permission and the outcome at the same time. If the court refuses the government permission to appeal it will not be able to take its case to the Supreme Court.

What next?

The government is expected to release its response to the consultation before the end of January, as it intended, including draft regulations on the FIT. The Court of Appeal judges will try to make a ruling on the case before 9 February, which is when the government must put regulations before Parliament to ensure they come into force on 1 April. However, Lord Justice Lloyd has said it would be “rather optimistic” to count on them meeting this deadline.

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