Huhne in fight to cut solar panels pay

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The Government has pledged to fight on after losing its latest attempt to slash the subsidies available to people with newly-fitted solar panels on their homes.

Environment campaigners and business leaders were celebrating yesterday after three appeal judges unanimously upheld a High Court ruling that Energy Secretary Chris Huhne lacks the power to introduce cuts to the subsidy scheme retrospectively.

Thousands of people who have had panels fitted since mid-December may now be able to collect fixed payments from the Government at the original, higher rate for the next 25 years.

Shadow Energy Secretary Caroline Flint said the Government owes a “huge apology” to solar panel firms forced to lay off staff at Christmas because of the speed the cuts were pushed through.

But Mr Huhne remained defiant, saying he would take the case all the way to the Supreme Court.

The Government is desperate to reduce the feed-in tariff (FIT) payments it makes to households and communities who generate green electricity through solar panels. Ministers decided subsidies would be halved for any new installations completed after December 12, 2011.

Those changes will formally come into effect from April.

But following protests, the High Court ruled it would be unlawful to introduce the cuts retrospectively in this way.

That decision was upheld by the Court of Appeal yesterday, with Lord Justice Moses stating the Energy Secretary “plainly has no such power to make a modification with such a retrospective effect”.

Environment campaigners called it a “decisive ruling”, while the Renewable Energy Association called for an end to the “fiasco” so that “the UK solar industry can get back to business”.

John Cridland, director-general of the Confederation of British Industry, agreed, saying: “The judgment should be used to draw a line under this saga, which saw the Government scoring a spectacular own goal, and confidence in the sector undermined.”

Yorkshire has proved a leading light for the solar industry since subsidies were first introduced by the Government last year.

Sheffield and Leeds have seen greater increases in the number of panels being fitted than anywhere else in the country. But local firms complained the Government’s sudden halving of the subsidies forced them to cut jobs just as the industry was taking off.

Don Valley MP Mrs Flint said: “The Government owes a huge apology to all those firms in Doncaster and South Yorkshire who have laid off staff around Christmas time because of the cuts to the feed-in tariff.

“The Government’s mishandling of solar energy has devastated order books, put off investors, and lost jobs in South Yorkshire and across the country.”

The subsidies were originally introduced to make it more financially viable for people to have solar panels fitted to their homes. But with solar panels getting cheaper, the Government says subsidy levels are now too generous and will severely deplete future resources – as well as hitting energy consumers in the pocket.

Climate change Minister Greg Barker insisted it was necessary to fight on “to put the brakes on a subsidy-fuelled boom”, which is “impacting on electricity bills” due to the amount the Government is being forced to pay out.

He said: “This could cost consumers £1.5bn. I think it worth taking the legal risk.”

And Mr Huhne later confirmed: “We are seeking permission to appeal to the Supreme Court.

“We have put before Parliament changes... to help reduce the pressure on the budget, and provide as much certainty as we can for consumers and industry.”