Slashing solar subsidies ‘unlawful’

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CONTROVERSIAL Government plans to slash the subsidies available for people who install solar panels on their homes have been ruled unlawful by the High Court in a major victory for environmental campaigners.

Pressure group Friends of the Earth and two solar panel companies – Solarcentury and HomeSun – had joined forces to challenge Coalition proposals to cut feed-in tariff subsidies (FITs), which are paid to households and communities that generate green electricity through solar panels. FITs were introduced by the previous Labour Government to drive forward the uptake of residential solar panels.

The guaranteed return they provide meant homeowners could potentially make back the thousands of pounds they spend on solar panels in around 10 years.

The scheme has proved successful, with many solar panel firms unable to keep up with demand from homeowners and businesses. Yorkshire has led the way, with faster take-up in Sheffield and Leeds than any other city.

But under pressure from the Treasury to cut spending, energy and climate change secretary Chris Huhne said the rate payable would be massively reduced on any installations completed after December 12 this year.

The reductions are being hurried through because the Government believes they are too generous and costly in the face of the falling costs of solar technology, and the number of people wanting to take advantage of the scheme.

Solar panel firms have accused the Government of “trying to kill” their fledgling industry.

And at the High Court in London yesterday, Mr Justice Mitting, said that the Minister was “proposing to make an unlawful decision” because the December 12 deadline had fallen in the middle of a formal consultation period. He said that the Energy Secretary was only entitled to make changes at this point which would further promote the take-up of solar panels – but that the proposals to slash FITS would clearly not have such an effect.

The judge said: “On the contrary, they will tend to undermine the confidence of those participating in the market for small solar systems.”

The judge refused the Energy Secretary permission to appeal to his court, saying the “prospects of success” were insufficient to justify permission.

The Government can make a direct application to the Court of Appeal, however. Climate Change Minister Greg Barker responded in robust terms, stating: “We disagree with the court’s decision. We will be seeking an appeal and hope to secure a hearing as soon as possible.

“Regardless of today’s outcome, the current high tariffs are not sustainable and changes need to be made to protect the budget.”

Environmentalists and MPs are now putting pressure on the Government to scale back the cuts.

Friends of the Earth director Andy Atkins said: “These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs.

“We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies – giving solar firms a much-needed confidence boost.

The Local Government Association, representing councils, said Ministers had “undermined confidence” in the “green agenda”.

And in a new joint report out today, MPs sitting on the environmental audit committee and on the energy and climate change committee attacked the proposed changes, concluding they could have a “fatal impact” on Britain’s solar industry.

The MPs said they accepted subsidies need to be reduced, but that this should be done in a more “orderly way” to avoid such a “shock” to the industry.