Press release

Government loses appeal over 'unlawful' solar cuts

25 January 2012

The Court of Appeal today (Wednesday 25 January 2012) unanimously rejected Government attempts to overturn last month's High Court ruling that its plans to rush through sudden cuts to solar tariff payments are illegal.

The three judges also refused permission for the Government to appeal to Supreme Court. Ministers are now "considering their options", including whether to apply directly to the Supreme Court for permission to appeal.

Friends of the Earth says any further appeal will create yet more uncertainty for solar firms and, after two courts have ruled their move illegal, is urging Ministers to concentrate on safeguarding the industry rather than wasting more time and money on further appeals.

The High Court ruled shortly before Christmas that Government plans to cut payments for any solar scheme completed after 12 December - 11 days before the official consultation closed - were unlawful. The judgement followed legal challenges brought by Friends of the Earth and two solar firms, Solarcentury and HomeSun, last month.

Today's judgement will prevent Ministers rushing through cuts to feed-in tariff payments in future, restoring some confidence to the UK's clean energy industry. But Friends of the Earth warns that unless Ministers change other parts of their solar subsidy proposals, up to 29,000 jobs could be lost.

Friends of the Earth is urging Ministers to find more money - paid for from tax payments the industry generates - to safeguard the long-term stability of the solar industry. The environmental campaigning charity is also calling for crucial amendments to proposed Government solar payment changes, including re-examining over-strict energy efficiency rules that will prevent 90 per cent of houses from claiming solar subsidies.

Today's ruling means that, subject to any further appeal to the Supreme Court, solar tariff payments will remain at 43.3p (p/kWh) until 3 March 2012 when - following Government moves last week - they will fall to 21 pence.

Friends of the Earth's Executive Director Andy Atkins said:

"This landmark judgement confirms that devastating Government plans to rush through cuts to solar payments are illegal - and will prevent Ministers from causing industry chaos with similar cuts in future.

"The Government must now take steps to safeguard the UK's solar industry and the 29,000 jobs still facing the chop. 

"Ministers must abandon plans to tighten the screw on which homes qualify for solar payments - and use the massive tax revenues generated by solar to protect the industry.

"Helping more people to plug into clean British energy will help protect cash-strapped households from soaring fuel bills."

 ENDS

 Notes to editors:

1. The full text from today's ruling is available for download from: http://www.foe.co.uk/resource/briefing_notes/fits_appeal_court_ruling.pdf

2.    Friends of the Earth's legal challenge to cuts in solar incentives is part of its Final Demand campaign, which calls for energy we can all afford and a public inquiry into the power and influence of the Big Six energy companies. Find out more at www.foe.co.uk/finaldemand.

3.    Photographs of a Friends of the Earth action outside the High Court last month - featuring a solar panel in a dustbin and two solar installers - are available for free at: http://www.flickr.com/photos/wwwfoecouk/sets/72157628428618941/

4.    Today's judgement means that the original 43.3p (p/kWh) rate will apply for anyone installing solar panels until 3 March 2012 for domestic systems, when it will drop to 21p. The Government took steps to introduce the new March cut-off date last week. Friends of the Earth welcomed the clarity the move will bring to the solar industry. See Government statement: http://www.decc.gov.uk/en/content/cms/news/WMSCH_FITs/

5.    The Court of Appeal ruling will give certainty to the industry that Ministers will not be able to act so abruptly in future. The Courts have ruled that Ministers must first consult with industry and then instigate Parliamentary procedures that take 40 days to enact.

6.    Friends of the Earth is calling on the Government to take steps to safeguard the future of the UK solar industry:

• Increase the overall budget for feed-in tariffs using tax revenues generated by jobs created by the scheme - this will enable more households to benefit from clean energy.
• Exclude housing association, school, council and other community projects from the damaging proposal to give multi-building solar projects even lower financial support.
• Only require solar projects on homes to install loft and cavity wall insulation where possible - rather than imposing much tougher energy efficiency conditions which would make 9 out of 10 householders ineligible for the scheme.

7.  The Government is due to publish the results of its solar consultation on 9th February 2012.  On the same day Ministers are due to set out plans for further changes to the feed-in tariff scheme. This is expected to include a Government target for the future size of Britain's solar industry. This will highlight whether or not Ministers have revised plans, released last year, to halve the size of the industry and allow thousands of jobs to be axed.

8.  The Government's proposals have already had a devastating impact. Countless planned clean energy schemes have been abandoned and thousands of jobs are under threat. In December construction firm Carillion warned 4,500 workers their jobs were at risk because of the Government's proposals. Examples of projects that have either been scrapped or are in jeopardy are available from Friends of the Earth's press office.

9. Calculations by Friends of the Earth and Element Energy suggest that the Treasury receives from the solar industry at least £330m per year in income taxes, corporation tax, and VAT. Friends of the Earth's calculations also reveal that any additional costs over budget that result from restoring the cut-off date to April, as well as allowing for moderate growth in the solar industry over the next three years at lower tariff rates, could be paid for by using this tax income - not increasing the costs to consumers. 

To view PDF files you will need to download Adobe Acrobat Reader. Visually impaired users can get extra help with these documents from access.adobe.com.

If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust