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Market News

 January 13, 2012
Solar appeal decision delayed until next week at the earliest

 The crippling uncertainty over the future of the UK's solar incentive scheme is set to continue, after three court of appeal judges failed to reach a conclusion on whether or not the government's proposed changes to the feed-in tariff scheme were unlawful.

It had been hoped that the judges would rule today on whether to hear a government appeal against a previous High Court ruling which branded proposed cuts to feed-in tariff incentives as illegal, on the grounds that they would come into effect before the end of an official consultation period on the proposed changes.

However, the judges failed to reach a verdict on whether or not the appeal should be allowed to proceed, ending hopes that a final ruling could be reached today.

They stated that they hope to make a decision as soon as possible in order to provide the industry with certainty over the future of the incentive scheme. But they argued that it was "rather optimistic" to think a decision could be reached before the end of next week.

The delay is likely to receive a furious response from solar firms who are increasingly desperate for the court and the government to provide clarity on when anticipated cuts to feed-in tariffs will come into effect.

"The stakes have increased massively today," said John Faulks, general counsel of Solarcentury. "The Secretary of State's defence is seriously worrying. He thinks he has the power to do whatever he likes to FITs whenever he likes. And that means no FITs are safe for any technology installed or not at any time.

"We will be awaiting a judgment for at least a week, and hope for the sake of all stakeholders in our renewable energy future -- investors, consumers and the general public -- that we win this case to secure the robust, secure feed-in tariff we need to drive our low carbon future. DECC have it within their power to remove the uncertainty immediately."

Currently it is unclear what level of support new installations can expect -- a scenario that has resulted in a month-long hiatus in new installations.

A spokeswoman from Homesun, one of the parties taking legal action against DECC, maintained that the rolled-up hearing was still faster than having the appeal on separate dates.

She told BusinessGreen that the rolled up hearing allowed the judges to make an informed decision because they hear evidence from both sides, adding that if DECC failed to secure permission, it would be unable to take the case to the Supreme Court.

However, she added DECC could go to the Supreme Court if it was granted leave to appeal and subsequently failed to win that case.

Clare King, a renewable energy lawyer at Osborne Clarke, said: "This is a frustrating result for many companies in the solar PV industry who were hoping for some clarity today. The judges clearly understand the need to get this issue resolved and have said that they will try to get the decision out by 9 February. In the meantime, all companies and investors can do is sit tight and wait."

Friends of the Earth, which brought the initial case against the government's consultation alongside a number of solar firms and green consultancies, reiterated its calls for the government to ditch its appeal and lay legislation before parliament that would allow it to cut feed-in tariff incentives in a legal manner from the end of February.

Writing on Twitter in response to the news of delay, head of campaigns at the NGO, Craig Bennett, said: "Chris Huhne could end uncertainty by tabling regs in Parliament to bring FIT down at end Feb in lawful rather than unlawful way."
Gaynor Hartnell, chief executive of the Renewable Energy Association, criticised the "cavalier" manner in which she said DECC has managed the feed-in tariff.

"No one liked the way the government handled this consultation," she said. "Whatever the outcome of the appeal, the court case should ensure that the government thinks twice about acting in such a cavalier manner again."
She also called for lower feed-in tariff rates to be set as quickly as possible to help stabilise the industry.

"Having said that, the majority of our members want to draw a line under this affair, look forwards, and get on with installing systems at the new tariff rates," she said.