Friday, 27 January 2012

Victory For Now – Government Appeal Rejected

By Robin Whitlock

The government appeal against the High Court decision concerning the December 12th deadline for Feed-in Tariff’s cuts has been soundly defeated in the Court of Appeal. Three judges presided over the hearing and their decision was unanimous. Unfortunately however, this isn’t quite the end of the story, since Chris Huhne has decided to take the case to the Supreme Court. The judges refused the government permission to do so, so that means Mr Huhne will have to take the case to the Supreme Court directly. Mr Huhne’s decision to launch a further appeal has again thrown the sector into disarray causing more confusion among installers, clients and investors. 

So far the whole episode has cost the taxpayer £66,000 in legal fees, a figure that has prompted Ed Milliband to call for the government to accept the decision and move on. Huhne, however, is adamant, blaming the whole episode on the ‘mess’ left behind by Labour. North Tyneside MP Mary Glindon joined Mr Milliband in his appeal to the government to stop wasting public money "How much more public money do you intend to waste fighting the court ruling?" she asked the Energy Secretary, to which he replied "Spending a few thousand pounds in order to save consumers £1.5 billion, which is what would have happened if we had left this case to run - the reality is that Labour introduced a scheme which was fundamentally flawed." Meanwhile the Renewable Energy Association has called the whole affair ‘a fiasco’ and demanded an end to it so that the sector can ‘get back to business’.

John Cridland of the Confederation of British Industry (CBI) has also joined in the fray commenting "The judgment should be used to draw a line under this saga, which saw the Government scoring a spectacular own goal and confidence in the renewables sector undermined." Friends of the Earth, HomeSun and SolarCentury, who launched the challenge against the government in the first place, have accused Mr Huhne of ‘making a mockery’ of the consultation process.

Mr Huhne has written a ministerial statement explaining his decision to seek a further appeal.


The Press Association

The Independent

Greenwise Business

Wednesday, 25 January 2012

Feed in tariff goes back to 43.3p

We will post more in the next day or so, but in short, the Court of Appeal rejected the DECC's case and, unless anything unexpected happens, all installations until 3rd March will qualify for the higher 43.3p feed in tariff. Those after the March deadline will get the 21p rate after April. This is a big difference to the return on a solar investment; about £4000 for a 4kW solar installation!

Tuesday, 24 January 2012

Court of Appeal to rule on FiTS Cut on 25th January

On Wednesday 25th, the UK Court of Appeal is due to decide whether or not the Government (DECC) has grounds for appeal against the December ruling that the rushed cuts to the feed-in-tariff, or not.

If the Court rules in favour of an appeal, then the reduced tariffs introduced on 12th December will stand and it is expected that the industry, lead by Solar Century and Friends of the Earth, will drop their legal challenge. However, should the court rule that the Government does not have sufficient grounds for appeal, then the FiTS will revert back to their pre-cut rates (up 41.3p / kW). Fearing that they would lose the right to appeal, the DECC has already introduced a contingency date of 3rd March, which would see all installations after this date subject to the lower tariffs.

The industry, however, remains split about whether or not a temporary reintroduction of the higher tariffs will be good for business. In the short term, we can expect a mad rush to install as many systems as possible at the higher rate of return, although this may also lead to the chaos and 'questionable' ethics of last November. Either way, we all have to accept and manage the new lower tariff rates from March, regardless of tomorrow's outcome.

Friday, 20 January 2012

UK Government Sets New Date For Tariffs Cut

... just in case it loses the appeal....

By Robin Whitlock

The government is aiming for a new deadline of 3rd March for a Feed-in Tariffs (FiTS) cut just in case it loses the appeal currently being considered by the Court of Appeal. The Department for Energy and Climate Change (DECC) has delivered a proposal for draft licence modifications before Parliament. Subject to the Energy Act 2008, the document makes provisions for “a reduced tariff rate (from 1st April 2012 onwards) for new solar PV installations with an eligibility date on or after 3rd March 2012”.

Energy and Climate Change Minister, Greg Barker commented in a ministerial statement “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge. 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. However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date. In the circumstances we believe this gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved.” 

The statement also reiterated the government’s intention, should it win the appeal, to stick to its original proposals including the December 12th deadline. Meanwhile Friends of the Earth welcomed the government’s plans to reduce the amount of uncertainty which it describes as crippling a thriving industry.

Renewable Energy Focus

Business Green

This is Money

Tariff’s stalemate costs UK solar industry £25k a day

By Robin Whitlock

The latest on the legal debacle over Feed-in Tariffs: while the country is waiting with baited breath to see if the government is granted leave to appeal, it has since emerged that the current stalemate is costing the UK solar industry rather a lot of money. According to analysis, the current stalemate is costing the industry some £25,000 per day, largely in cancelled and deferred orders, exacerbated by increasing sales costs, uncertain wage bills and depreciation of redundant stock. The situation has been made worse by lack of consumer confidence and considerable confusion.

In an article for GreenWeek, David Hunt of Eco Environments described the industry as being in ‘total limbo’ and criticised the government for their handling of the whole affair. “The Government has not covered itself in glory during this whole sorry saga” he said “and today’s outcome further exacerbates the negative impact of their actions. The industry needs to move forward without the prospect of months of continued uncertainty hanging over it. While the reduction in the feed-in-tariff to 21p/kWh for domestic customers is greater than we would have wanted, the industry now accepts that we have to work with the new rate which still offers a fantastic return on investment for homeowners.”

He went on to state that the major issue is the possible outcome of the appeal. “If the Government wins its appeal, the industry is spared the return to a 43p domestic FIT rate which will blow an already overspent budget, causing a short boom, and a catastrophic bust for the renewable energy industry, not just solar. The FIT budget is not separated by technology, if it is all spent on solar PV, then Wind, Hydro and other eligible technologies will lose the FIT subsidy too. However, it would cause long term uncertainty for the industry, having created a precedent that Government can make retrospective changes to FIT and other subsidies, giving major concerns to any potential investor, domestic or commercial, now and in the future. If on the other hand the Government loses the appeal, then we will end up with the boom and bust, wiping out the FIT budget at a stroke. This will result in a nightmare for all renewable installers with short term ‘cowboy’ selling and long term job losses and company closures.

Hunt believes that the present state of limbo is likely to continue given that either side could elect to go to the Supreme Court if they lose. “The only certainty is seems will be ongoing uncertainty which is already costing jobs and creating a crisis of confidence among potential investors. This will not help to secure the futures of many companies which simply will not survive another few months’ of paralysis.”

Meanwhile an even more serious issue threatens to follow hot on the heels of the FiTS debate. In April Ministers plan to insist that only homes rated Grade C with regard to energy efficiency will be eligible for full FiTS subsidies. At present 90% of homes in the UK do not meet this requirement and industry experts predict that upgrading to the required standard will cost somewhere between £5,300 and £12,000. Such a figure is likely to beyond the capability of most ordinary people. Hunt believes that it is absolutely imperative that the government abandon this policy.

“That is if we still have any feed-in-tariff left after the High Court judgement!” he said.


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