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 January 04, 2012
DECC lodges appeal against High Court solar feed-in tariff ruling

 The government has this afternoon filed a request to appeal against a High Court ruling that branded its plans to rush through cuts to solar feed-in tariffs as unlawful, despite concerns the continuation of legal proceedings will prolong investor uncertainty.

A spokeswoman from the Department of Energy and Climate Change (DECC) told BusinessGreen that its legal team had met a 4pm deadline to request an appeal against last month's ruling to the Court of Appeal.

She added that DECC hoped permission to appeal would be granted as soon as possible to provide clarity for consumers and industry on the future of feed-in tariffs and the recently closed consultation.

Writing on Twitter, climate minister Greg Barker said the timing of the appeal was up to the court, but he expressed hope that the long-running legal battle would be resolved "well before the end of the month".

Mr Justice Mitting ruled on 21 December that it would be unlawful for the government to effectively cut feed-in tariff rates for installations completed on or after 12 December, as proposed in the government's consultation, on the grounds that the changes pre-empted the close date for the consultation.

He also rejected an immediate appeal request from DECC's lawyer, warning that any appeal would have limited chances of success.

However, he set a deadline of 4 January for DECC to seek permission to appeal from the Court of Appeal, in a bid to ensure that any hearing could take place as soon as possible when the court's term begins on 11 January.

DECC has today met that deadline and outlined its grounds for appeal in a move designed to help speed up the legal process.

"The High Court's decision was based on the view that the proposed approach to implementing new tariffs for solar PV is inconsistent with the FIT scheme's statutory purpose of encouraging small-scale low-carbon electricity generation. We disagree with this for a number of reasons," DECC said in a statement.

"The overriding aim of the proposed reduction in tariffs for solar PV (as set out in the recent consultation) is to ensure that over the long term as many people as possible are encouraged to install small-scale low-carbon generation (including other technologies as well as solar PV) and benefit from the funding available for the FIT scheme."

DECC has consistently warned that delaying the proposed cuts to incentives could result in the feed-in tariff scheme exceeding its spending cap -- a scenario that some solar industry insiders fear will result in deeper cuts to incentives from April.

A spokeswoman for the department added that it would also be appealing on the grounds that the "judicial review was premature as no decision has yet been taken, and a decision will only be taken after a full analysis of the responses to the consultation".

The appeal has been attacked by a number of green groups that fear the on-going legal battle means it remains unclear whether current levels of feed-in tariffs will continue and when cuts to the level of incentives will be imposed.

Friends of the Earth, one of a number of parties that took legal action against the government plans, warned the government it risked wasting public funds by continuing legal proceedings.

"The government's illegal cuts to solar tariff rates have near-crippled an industry and threatened thousands of jobs," said Friends of the Earth's head of campaigns, Andrew Pendleton.

"Trying to appeal the High Court's ruling is an expensive waste of taxpayer money -- the court says the government has no realistic chance of winning, and it will prolong uncertainty among solar companies just when they need reassurance.

"Ministers should accept the High Court's decision and end business uncertainty and protect jobs with a clear plan to reduce payments from February, in line with falling installation costs."

However, the latest development came as a number of solar industry blogs revealed that government fears the feed-in tariff scheme will exceed its budget could prove well founded.

Drawing on the latest figures from DECC, installer Leeds Solar said the feed-in tariff looks set to be £109.5m overbudget in 2012-13 based on the current installed capacity alone.

It also predicted that if the same capacity of solar panels are installed in 2012 as in 2011, then the feed-in tariff budget for 2012 will exceed the Treasury's 2012-13 spending cap twice over.

The company urged the government to review the £856m cap imposed on the scheme by the Treasury. "It's clear there is no possibility of the FIT scheme staying within these spending limits, and the government must now face reality and increase those limits," the company said.

Solar industry campaigners have repeatedly argued that the spending cap may need to be relaxed, insisting that a well-managed increase in the budget will only result in a modest rise in energy bills.

Meanwhile, shadow energy and climate change secretary Caroline Flint called on the government to "go back to the drawing board and bring forward more measured proposals that guarantee the continued growth of the solar industry".

"The government's reckless cuts to the feed-in tariff have thrown the solar industry into disarray, putting thousands of jobs and businesses at risk, and hitting families trying to do the right thing and cut their energy bills," she said

"What the industry needs -- and what the public deserves -- is certainty about the future of solar power, yet by appealing against the ruling the government is creating even more uncertainty."