Government's solar energy cuts ruled illegal

22 December 2011

Government plans to cut the subsidies on homeowners' solar panels are illegal, the High Court has ruled.

The ruling spells victory for Friends of the Earth and two solar firms Solarcentury and HomeSun.

The court agreed that proposals to cut feed-in tariff payments for any solar scheme completed after 12 December – 11 days before the official consultation closed - were unlawful.

Under the feed-in tariffs programme, people with solar panels on their homes are paid for the electricity they generate. The new tariff of 21p per kilowatt-hour, less than half of the current 43p tariff, had been expected to come into effect from 1 April. But in October the government said anyone who installed their solar panels after 12 December would receive the lower tariff.

Potentially fatal blow

Friends of the Earth's executive director Andy Atkins comments on the ruling: "These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs.

"We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies - giving solar firms a much-needed confidence boost.

"Ministers must now come up with a sensible plan that protects the UK's solar industry and allows cash-strapped homes and businesses to free themselves from expensive fossil fuels by plugging into clean energy."

Friends of the Earth is urging the government to come up with a new proposal that would allow solar payments to fall in line with reduced installation costs, while ensuring the solar industry plays a key part in developing a cleaner future.

It also says the government should do more to encourage poorer households to install solar panels and there should be more support for community-owned schemes.

John Cridland, director-general of the Confederation of British Industry, has also been critical of the government's plan to cut the tariff, saying it risked derailing the low-carbon sector and the loss of thousands of jobs.

Greg Barker, the climate change and energy minister, said in October that due to the fall in cost of installing solar panels, the government needed to accordingly reduce the feed-in tariff. He also said that the solar industry needed to avoid "falling victim to boom and bust".

This article was written for our sister website Money Observer

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