The government just lost its appeal over the High Court ruling (of December 21, 2011) that they acted illegally in announcing early cuts to the FIT – Feed In Tariff – payments for solar panel arrays.
Daniel Green, Chief Executive of Homesun, was interviewed on the BBC News website. He described the government subsidy as the ‘most popular energy efficiency micro-generation project that’s ever happened in the UK’ and said that over 300,000 people had applied to his company as a result.
Roughly 30,000 people are currently employed by the solar power industry, and a substantial number risked redundancy if the government’s plan to halve the subsidy on December 12th was approved.
Welsh MP Elfyn Llwyd (Plaid Cymru) said that while there had been a pre-Christmas boom for installers as consumers rushed to beat the December 12th deadline, their order books for the new year were empty. Some companies were facing ‘up to a 60 or 70% reduction in their workforce’, he said.
In 2011, Sharp, one of the main UK manufacturers of solar panels, announced a £30 million expansion of their Wrexham plant which would lead to 300 new jobs. As early as mid-November they confirmed that they were ‘reviewing their position on further expansion’.
The Court of Appeal have now upheld the High court’s decision. Additionally, they have refused permission for the case to be taken to the Supreme Court – but the government might do so, anyway.
Energy Secretary Chris Huhne’s ministry was also condemned for ‘making a mockery’ of the consultation process because the date on which they proposed to change the tariff levels was scheduled prior to December 23rd, the end of the supposed consultation period.
However, while this is clearly a step in the right direction as far as consumers and solar panel installers is concerned, this decision is likely to lead to a further period of uncertainty for both.
If the government does manage to take its case to the Supreme Court and win, any panels installed after December 12th will only qualify for the slashed tariff rate of 21p/kWh. However, if they lose their appeal yet again – and let’s not forget they’ve now lost it twice – panels will continue to reap the 43p/kWh tariff (one of the most generous in the world) until at least March 3, the government’s new ‘contingency plan’ cut-off date.
While some may be tempted to risk it, the best advice would seem to be to make sure you can afford the lower tariff of 21p/kWh before investing.
The reason behind halving the tariff rate was supposedly that the funding set aside for it would be used up. However, Daniel Green points out that the industry as a whole generates £300 million for the treasury per year, and that the subsidies are paid for – in full – by the energy companies themselves. So, cutting the subsidy will in fact lead to less tax money being generated for the government as well as greater profits for the energy companies.