Isra-Mart srl:Solar firms meet to discuss legal action over feed-in tariff review

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Isra-Mart srl news:

Executives from up to 30 large-scale solar PV firms will today meet with lawyers to decide whether to take legal action against the Department for Energy and Climate Change (DECC) after it announced a surprise review of the feed-in tariff (FIT) incentive scheme.

Stephen Hill, a partner at law firm Eversheds, told BusinessGreen his team is currently "exploring a number of options" with firms that have been planning to build solar projects larger than 50kW, including the possibility of a judicial review.

Projects larger than 50kWh now face the threat of seeing feed-in tariff incentives cut or removed altogether if they come online after the new tariffs are announced, which DECC has slated for the summer.

Secretary of State for Energy Chris Huhne announced last week he was bringing forward a review of the FIT scheme in an attempt to address growing fears that large solar farm developers could eat into the limited funds available for smaller rooftop installations.

Many installers had been expecting the government not to review the level of incentives available through the scheme until 2012, giving developers time to gain planning permission for projects before any cuts come into effect.

DECC has said that the new review will not be retrospective and feed-in tariffs for all installations that have been approved under the scheme will remain the same. But Hill said there is a now question hanging over whether the decision to bring forward the review means the government has gone back on its word.

Andrew Newman, finance director at Low Carbon Investors, said DECC is likely to make tariff rates for green field projects very unattractive to deter potential investors.

"Clearly the threat is to large-scale solar-only developers," he told a briefing at the London Stock Exchange late last week. "A lot of people, based on government assurance, have spent an awful lot of money developing projects with a long-term investment horizon and expecting that in 2013 the opportunity will go then... But they expected to get projects in the ground and make a return over that period."

He predicted there will now be a lot of pressure on developers to secure financial backing and install planned projects before the government announces its revised feed-in tariffs in July.

In related news, Cornwall Power managing director Andrew Williams sent an email to energy minister Charles Hendry last night requesting a meeting to discuss the legitimacy of the review.

Williams has accused DECC of 'changing the rules' on the FIT, putting the future of the company's planned 5MW solar farm in Lanhydrock in limbo.

"The FIT is the only mechanism driving the adoption of small and mid-scale PV in the UK. If this is changed, there is no other policy that will continue this kind of development to meet the changes needed. This is completely at odds with global policy," he wrote.

"Cornwall Power has been left with no alternative but to consider the implications of mounting a legal challenge to this reversal of government policy."