Solar industry to take legal action over feed-in tariff cut as CBI lambasts decision

Solar firms led by Solarcentury are launching legal action over the UK government’s decision to cut feed-in tariffs (FITs) by over 50%, which was lambasted yesterday by the director-general of the CBI.

Green group Friends of the Earth has also threatened legal action over the decision, hinging on the fact that the change to the tariff from 43p per kWh to just 21p will come into effect in six weeks, before the end of the official consultation on proposals on December 23.

Solarcentury says it is seeking an interim injunction on the December 12 deadline, which it says is “illegal, irrational and unreasonable”.

The action will seek to stop the cuts to the tariff levels until a “proper, legal review” has been carried out and the correct processes have been followed.

The company says it denounces the government’s proposals “in the strongest possible terms” and warns that many large contracts for housing associations and local authorities have already been cancelled.

“We expected a proper and fair consultation on the review of FITs. We expected to have the time to plan for the next stage of the development of the market. We were all expecting a new tariff from April 2012,” says a statement from the group of solar companies. “Instead we get a ready-made decision which seriously harms the solar industry and gives us less than six weeks to save the businesses we have built up over multiple years.”

Solarcentury chair Jeremy Leggett says it is “profoundly depressing” that the self-proclaimed ‘greenest government ever’ has launched an attack on a growing industry that employs around 25,000 people in the UK.

The government’s decision to slash FITs by over 50% for small-scale solar installations, which it maintains it has to do avoid exceeding its spending cap, has drawn criticism from many quarters – now including the business lobby group the CBI.

Speaking yesterday at the CBI’s East Midlands Annual Dinner, director-general John Cridland labelled the move “the latest in a string of government own goals”.

He warned that the UK’s low-carbon sector, which has grown at home and across the world throughout the recession, could be derailed by such unexpected policy changes.

And Green Party MEP Jean Lambert is calling on the European Commission to investigate whether the decision will weaken the UK’s ability to meet its legally binding EU renewable energy targets.

The 2009 Renewable Energy Directive requires the UK to generate 15% of its energy from renewable sources by 2020. To date, the FIT has driven the installation of some 100,000 solar schemes across the UK.

Lambert has tabled a priority question to the Commission, asking it to scrutinise the effect of the cut on the UK’s ability to meet its obligations under the Directive.

“The UK government has long since submitted its national action plan to meet the Directive on Renewable Energy… It now falls to the government to demonstrate that it is not changing an agreed component of its roadmap and that the UK is still on course to deliver 15% of energy from renewable sources by 2020,” he says.

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Related stories:
UK government could face legal challenge over solar feed-in tariff cut (7-Nov)
UK government’s feed-in tariff slash incurs wrath of solar industry (1-Nov)
UK Government slashes feed-in tariffs for solar power (31-Oct)

11 November 2011