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Tuesday, 20 December 2011

Government FITs Slash Subject to Urgent Judicial Review

Judicial review proceedings start today on the government’s decision to slash Feed-in-Tariffs, the subsidy for solar panels, before the end of its consultation.

The case is being brought by SolarCentury, HomeSun and Friends of the Earth (FoE), following the government’s decision to reduce the tariff for smaller installations by more than 50 per cent.

The Department of Energy and Climate Change (DECC) says that under the proposals, the new (lower) subsidy would apply to all new solar installations with an eligibility date on or after 12 December 2011. However, the consultation doesn’t end until 23 December 2011.

The high court had ruled on 5 December that there was no need for an immediate review of the situation but Mr Justice Mitting, sitting last Thursday, said given the "economic risk" for companies there was a need for urgency.

DECC said it would be defending its position.

The Guardian reports FoE’s executive director, Andy Atkins:

"We're delighted the high court has given the go-ahead to our legal challenge. We believe government plans to abruptly slash solar subsidies are not only unfair, but illegal...These proposals have already had a disastrous impact on the solar industry - fledgling clean businesses have had the rug pulled from under their feet and a shadow hangs over thousands of jobs."

The government has argued that subsidies should be cut back because the price of solar equipment was falling rapidly and householders did not need such generous subsidies to convince them to put panels on their roofs to generate their own energy.

Similar subsidies are being cut in solar giant, Germany (which this year abandoned nuclear energy) and Spain following a huge decline in costs triggered mainly by low cost manufacturing competition from China.

However, look at what is now happening to the solar industry in Germany. The Guardian reports:

“Germany, which has been at the forefront of the European solar boom, has seen its local renewable companies badly hit. On Tuesday Berlin-based Solon, the first German solar company to list on the stock exchange, said it would file for insolvency while local market leader, SMA Solar, said last month it would lay off 1,000 temporary workers by the end of this year.”

Many people too are against the subsidy because they believe it comes at the expense of higher energy bills for everyone else.

The judicial review hearing is set for today and tomorrow.

UPDATE 20/12/11 
greenwise report that Sam Grodzinski QC, appearing for HomeSun Holdings Ltd, told the court, in a poetic moment, that Chris Huhne's plans to cut the FIT  for solar installations are like Macbeth as he plots to kill King Duncan: "If it were done when 'tis done, then 'twere well it were done quickly." (!)

Quoting the Scottish Play is generally not for the superstitious. 

UPDATE 4/1/12

The court found against the government. See my 2012 post Solar in Limbo as Government Appeals Lost FITs Case for an update.

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