The Government could face a legal challenge if tariffs paid to homes, businesses and communities for generating small-scale renewable electricity are cut in tomorrow's Comprehensive Spending Review, Friends of the Earth warned today.

In a letter sent to Energy Minster Greg Barker, the environmental campaigning charity points out that feed-in tariff levels have been set out by the Government, with a clear statement that they will not be reviewed - let alone reduced - until 2013.

Friends of the Earth warns that any change to tariff levels before this review could lead to a legal challenge from councils, community groups or small-scale energy producers who have planned and invested in renewable electricity infrastructure expecting that published tariff levels will not change. According to a report today feed in tariffs could be cut by 10 per cent.

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.

"The Government has clearly set out tariff levels for the first three years of the scheme, and councils, community groups and businesses have planned and invested accordingly. Reviewing tariff rates could undermine these plans.

"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."

Concerns about a possible cut to feed-in tariff rates were highlighted last month when Energy Minister Charles Hendry MP said: "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."

A Friends of the Earth briefing on the spending review is available at:

ENDS

Notes to editors

1.   A copy of the letter sent to Greg Barker, Minister of State for Climate Change, is available on request.

2.   Feed-In Tariffs (FITs - also known as the Clean Energy Cashback) were introduced in April 2010. The scheme pays households, businesses, communities and local authorities for the renewable electricity they generate from eligible installations such as solar panels and wind turbines.

Owners of the installations receive a 'Generation Tariff' for the amount of electricity they generate. This differs between technologies. The level of the tariffs which are paid to new installations entering the scheme will be reviewed in 2013 and every four years after that. However once an installation enters the scheme it gets the same tariff level for the contract period - 20 or 25 years.

But a scheme starting the following year may get a different tariff which will also be fixed for the contract length. This payment is the same irrespective of ownership. The tariff for new wind and solar PV installations entering the scheme declines each year by a certain percentage.

Owners also receive an 'Export Tariff' for electricity which is not used onsite and which is exported to the grid. This is fixed for all technologies at all scales for the duration of the tariff.

Generators get the benefit of using their own electricity onsite first. This means they may import less electricity from the grid and therefore reduce their own energy bill.

3.   The Government set tariff levels for FITs that have been widely published and disseminated. The guide to FITs produced by Ofgem (the scheme's
administrator) sets out these tariffs and states "the rates that customers receive under the FITs have been set by DECC and are listed in the tables below.DECC intend to review tariffs in time for 2013- this would not affect the generation tariffs of generators already on the FITs scheme". (Ofgem 'Introducing the Feed-in Tariff scheme')

4.    In response to a question about payments received by households for exporting electricity to the grid, Charles Hendry said: "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. We are absolutely committed to encouraging the roll-out of renewable electricity and renewable heat, but we must study very carefully exactly how these schemes can be paid for".

5.   The Guardian "understands that the FITs will be cut by 10%" - Tuesday 19 October 2010