Court on a loop: Government appeals solar ruling (again)

Donna Hume

22 February 2012

Yesterday the Government appealed - for what seems like the umpteenth time - against the high court ruling on our successful solar legal challenge. It took them 27 of their permitted 28 days to appeal to the Supreme Court and formally contest what four judges have so far ruled.

What took them so long? Taking four weeks to lodge an appeal (all the time maintaining the possibility that they might retract it altogether) was a draconian but effective tactic to drive down installations: the longer the uncertainty around tariff rates, the longer before installations pick up. This will no doubt have pleased the money men in the Treasury.

But aside from court room high-jinx there have been other important recent developments.

First we had a major step forward last week. Government announced it is topping up the solar budget by an extra £1bn. That's more than double what it previously was and represents a major victory for the greener Ministers within DECC.

They also said they want to see 22GW of installed solar by the end of the decade. To put that in context, it's 22 times what we've currently got and 3.5 times their previous ambition.

Not too shabby really, especially as back in October we were looking at the very real possibility (and fairly transparent Government intention) of a totally decimated solar industry and up to 29,000 job losses.

But this isn't chocolate boxes and roses. It seems likely the industry will shrink in the immediate future, before growing again in order to meet the new ambition. That means job losses in the short term. And while the extra cash and the ramped up ambition is welcome, the continuing undermining of community and social housing projects is deeply worrying.

The proposed new tariffs for 'multi-roof' social housing and community projects leave them hopelessly under-incentivised and would in reality see very few getting off the ground. Token measures (such as the 25 roof threshold, under which the reduced 'multi-roof' tariff won't apply if you are installing a social housing project) are meaningless in practice, as few projects of this type operate at such small scale.

And proponents of the 'rent-a-roof' model - the only way those without access to up-front cash can take advantage of the feed-in tariff outside of community projects - face a bleak future. The proposed tariff rate for these types of projects is 4.5p/kwh. There will be very few companies attracted by that.

As well as 'multi-roof' schemes, the proposals look to reduce tariff rates for all solar at 6 month intervals and additionally each time a new ceiling of solar installations is breached. Government documents say this could happen 'more than once every two months', which wouldn't fill me with confidence if I was a solar installer buying panels in bulk at a fixed price in order to sell them over a period of months.

This approach presents new uncertainties, but Friends of the Earth is much more comfortable with tariffs being set according to how much solar is installed in the real world, rather than by knee-jerk Government reviews like the ones we saw last year.

So what does it all add up to?

While the long term future of the solar feed-in tariff scheme seems more secure, the whole scheme is being tilted much further towards people who own their own houses and away from social housing and community projects.

We think the scheme should favour social housing and community projects as well as work for individual homeowners.

We want more support for social housing and community projects, not less. We want more opportunities - not fewer - for people battered by 'Big Six' price rises and ham-strung by fuel poverty to reduce their energy bills and tap into decentralised, clean energy generation.

And what about that grand new level of ambition? Ministers are to be applauded for having vision for a long term solar future, but nothing produced so far demonstrates how we're actually going to get there. The Government's impact assessment provides a range for what their own policies will deliver by 2020. That range is 1.4GW of solar (i.e. roughly what we've got now) to 31GW. Even taking into account the obvious unknowns, a gulf of that size indicates a staggering lack of faith in their own policies.

So to help DECC on their way, here are some policies they should introduce:

1. Increase support for community and social housing projects.
   Start by introducing a sensible 'community tariff' (which we've been promised but hasn't so far emerged)
2. Bring in a lower tariff trigger as well as an upper one.
   Current plans say tariffs will drop if solar deployment is 25% higher than expected. Why not bump them up again if deployment is 25% lower than expected?
3. Scrap harsh energy efficiency requirements
   that impede community energy projects.
4. Drop the court appeal
   and spend more effort developing 1, 2 and 3, above, rather than pursuing costly appeals.

Thanks to bullish campaigning and a massive public appetite for small-scale, decentralised, green energy, we're looking at a much brighter future for solar than we were a few months ago.

Now Government must prove it's serious about delivering this bright future, and delivering it fairly.