The Solar Industry remains in dark over feed-in tariff rates after Climate Minister Greg Barker confirms appeal against High Court ruling.
The government is preparing to appeal a High Court decision that branded its plans to rush through cuts to solar tariff payments as “legally flawed”, leaving the industry in the dark over the current level of incentives for new solar installations.
The Department of Energy and Climate Change (DECC) will tomorrow file an appeal against last month’s ruling by Mr Justice Mitting, who said it would be illegal for the government’s proposed cuts to have an “effective date” of 12 December, two weeks before the consultation officially ended on 23 December.
Mitting said DECC had until 4 January to request an appeal, but warned any appeal would have limited chances of success. Climate Minister Greg Barker confirmed on Twitter that his department would meet the appeal deadline, reiterating that the government remains committed to halving the level of incentives available for solar installations to ensure the scheme does not exceed its budget.
“Budget means 4 every 1 new taker @ 43p, 2 homes won’t get it at 21p,” he wrote.
However, David Hunt, sales and marketing executive at EcoEnvironments, asked Barker what he should tell consumers today given it remains unclear whether new installations completed after 12 December will enjoy the current feed-in tariff rate of 43p per kWh or will see payments cut to 21p per kWh from April as the government had originally proposed.
Barker responded: “Clearly court case prolongs uncertainty but many installers r telling us @ 21p solar pv still makes sense for right home.”
He also confirmed that a second consultation will be published this month including proposals for new tariffs for non-PV technologies. Howard Johns of the Cut Don’t Kill campaign said DECC’s request for an appeal means that the current feed-in tariff rates are unknown.
“So we are in limbo,” he wrote in a blog posting. “In theory we are back to square one with the rates back to what they were pre 12 December. However, we will not be able to say that unless the government is not granted an appeal or loses an appeal hearing.”
He predicted that if the government wins the appeal it could reinstate the 12 December reference date. But if it loses, then the old feed-in tariff rates are likely to remain in place until at least mid-February.
DECC has consistently warned that delaying the proposed cuts to incentives could result in the feed-in tariff scheme exceeding its spending cap – a scenario that some solar industry insiders fear will result in deeper cuts to incentives from April.
The government had even warned that the scheme could exceed its spending cap by April this year if changes are not brought into effect quickly. It now remains unclear if Mitting’s ruling will result in the scheme going bust.
There was further confusion after a document published by DECC last week appeared to suggest it had delayed the cuts to 1 April. Under the initial proposals all new solar PV installations with an eligibility date on or after 12 December 2011 would receive the higher tariff before downgrading to the lower tariffs on 1 April 2012.
However, the First Progress Report on the Promotion and Use of Energy from Renewable Sources for the United Kingdom published on Thursday, said that “following [a consultation on 31st October 2011] new solar PV tariffs for smaller-scale installations are proposed to be implemented from 1st April 2012”.
A DECC spokeswoman told BusinessGreen that it was still hoping to ensure the cuts applied to any project completed after 12 December, with the full changes coming into effect on 1 April 2012.
Charles Perry, co-founder and partner of consultancy SecondNature, which supported the legal action, told BusinessGreen that the confusion surrounding the consultation had undermined corporate confidence in the feed-in tariff policy and had resulted in a number of potential solar installations being delayed.
“In opposition the Conservatives promised the three Cs: confidence, clarity and continuity,” he said. “DECC must learn from the outcome of the judicial review and improve on all three.”