Ministers warned over feed-in tariff cut legality

Friends of the Earth has written to Ministers to warn that they could face a legal challenge if the feed-in tariffs paid to homes, businesses and communities for generating small-scale renewable electricity are cut in the Comprehensive Spending Review.

The scheme was set out by the previous Government, with a clear statement that tariffs will not be reviewed - let alone reduced - until 2013. Councils, community groups or small-scale energy producers who have planned and invested in renewable electricity installations based on expected tariffs could potentially challenge any changes.

Friends of the Earth’s Policy and Campaigns Director Craig Bennett said: “If Ministers try to cut agreed payments for green electricity generation they may find themselves in court.

“Cutting feed-in tariff levels would risk destabilising the UK’s small-scale renewable electricity market at the precise moment that it is finally starting to gain momentum, as well as undermining David Cameron’s promise to lead the greenest government ever.”

Any move to cut the tariff now would fly in the face of the enthusiasm for the scheme Ministers showed when they were in opposition and their statements about the importance of giving certainty to investors.

Speaking as Shadow Energy Minister in the final debate on the Energy Bill in 2008, Charles Hendry MP said: “A feed-in tariff needs to be a guaranteed level of payment for a fixed period of time, in order to give investors the certainty that they need and a guaranteed rate of return for each unit of electricity generated.”

“Certainty is needed for anyone deciding to invest in small-scale generation, and it would not be provided if the Government had the power to change the tariff halfway through the period in which it was supposed to be fixed at a certain level.”

He also joined campaigners to sign a solar panel in support of introducing the feed-in tariff scheme and posed with a model renewable energy powered village (see photo) alongside other shadow ministers.

However as Energy Minister Charles Hendry recently told the House of Commons:

I can say that we are looking at these rates in the totality of the comprehensive spending review. We inherited schemes from the previous Administration that were extremely generous but which were not absolutely clear as to who was going to pay for them and how they were going to be paid for.