Government offers compromise over solar subsidies

As the solar industry faces uncertainty Charlotte Reid looks at the latest news in the FIT-tariff subsidy case as the Government decide what to do after the court case.

Ministers have come to an agreement that if they lose the Court of Appeal they will pay the higher rate payments for solar panels for another three months, in hope to get some certainty back in the industry.

Minister for environment and climate change, Greg Barker, said, “We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole Feed-in Tariff budget”.

“We’re appealing against the court ruling that’s challenged our proposal for a December reference date. This remains our aim, and we are waiting for the judgement of the Court of Appeal. But this is too important for us to sit and do nothing while we wait. Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March.”

Barker said, “We are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date”.

The industry was thrown into uncertainty when in December the Government announced cuts to some renewable energy subsidies, which saw cuts to solar panel subsidies.

The deadline imposed for when people could no longer qualify for the FIT was December 11th 2011. This saw energy company Good Energy stay open all weekend to process applications. As a result of the deadline 100,000 people rushed to join at the old rate before it had passed.

Since then the environmental group Friends of the Earth took the Government to court, which led to the cuts being deemed “legally flawed” by the High Court.

The Government then appealed against the High Court’s ruling which Friends of the Earth campaigner Andrew Pendleton said was pointless because, “The court says the Government has no realistic chance of winning”.

Friends of the Earth executive director, Andy Atkins, said it was good that the Government “is taking steps to sort out some of the uncertainty that’s crippling a thriving UK industry”.

He said, “Planned cuts will at least allow solar firms to start planning for the future”, which was the problem last time because “by trying to rush through payment before the consultation closed ministers created a shambolic mess that threatens 30,000 jobs and the future of the industry”.

Ed Gill, head of external affairs at Good Energy said there are a lot of questions that still need to be answered “but the Government’s efforts to improve certainty are welcome”.

Gill added, “However, real progress would be for ministers to set out a long term future for FIT that recognises that it’s the best vehicle we have for delivering the decentralised energy market we need”.

“This has to include a new structure that takes into account the popularity of a scheme that allows people, households and businesses to have greater control of their energy bills. It has to avoid introducing emergency consultations and measures like the proposed energy efficiency standard. This would give certainty to the industry, and deliver the kind if changes we need to fix the energy system in this country.”

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