Isra-Mart srl: Solar firms seek injunction against DECC over feed-in tariff cuts

www.isramart.com

A group of solar firms have today confirmed they will launch legal action against the Department of Energy and Climate Change (DECC) over its controversial proposals to halve incentives for solar installations with just six weeks' notice.

The group, led by Solarcentury, said it is now seeking an interim injunction to stop the government imposing changes to the feed-in tariff scheme from 12 December, ahead of the completion of the formal consultation period on the proposed reforms.

The move follows an ultimatum earlier this week from Friends of the Earth, which warned climate minister Greg Barker that unless he ordered a rethink on the government's proposed cuts by 4pm tomorrow, the green NGO would also launch legal action.

The DECC review of solar feed-in tariffs, which was launched on 31 October, controversially proposes that all solar installations completed after 12 December will only be able to access the current level of incentives until next April, at which point tariff payments will be cut by 50 per cent to the new proposed rate.

The government insists the changes need to come into effect from next month in order to avoid a "gold rush" that would threaten to push the feed-in tariff scheme past its spending cap – a scenario that would result in increases in energy bills.

However, Solarcentury and its partners will argue that the pace of the cuts and the decision to change the scheme before the completion of the official consultation on 23 December is "illegal, irrational and unreasonable".

A spokeswoman for the company said the legal action would centre on the pace at which the government is trying to impose the cuts to incentives and will initially seek an injunction that stops any cuts to tariff levels being made until DECC has "completed a proper, legal review and followed the correct processes".

She added that the company had seen many large contracts cancelled over the past few days as a result of the pace of the proposed cuts, including several deals with housing associations and local authorities that were originally planned to be completed early next year ahead of the April 2012 date that had been the expected cut-off date for any changes to the feed-in tariff scheme.

Other firms are reporting that redundancies could be confirmed within the next month as a result of the changes.

Solarcentury chairman, Jeremy Leggett, said the company had been left with no choice but to resort to the courts.

"It is profoundly depressing that the greenest government ever has, after just 18 months, launched such an assault against a growing industry employing 25,000 people," he said. "I would much rather be helping to create many more Big Society jobs than taking the government to court, but sadly they leave us no choice. If they were to get away with this the consequences will go way beyond the wider PV sector. What low-carbon industry investor or company will be able to trust the prime minister, Mr Huhne and Mr Barker ever again?"

The other companies in the group seeking legal action are yet to go public, but Solarcentury predicted the coalition would grow as more solar firms seek to delay the proposed changes.

Pressure is mounting on the government to order a rethink, with Friends of the Earth's legal action looking almost inevitable, and a host of renewable energy firms and housing associations writing to Prime Minister David Cameron, calling for the proposed cuts to be restructured. A day of protests by the industry is also planned for Westminster on 22 November.

In addition, BusinessGreen has learned that a number of councils that are at risk of losing hundreds of thousands of pounds as a result of the changes are also considering legal action against DECC.

Solar industry representatives are scheduled to meet climate change minister Greg Barker later today to argue that the proposed cuts should be phased in more slowly and should be more modest in scale.

They are also expected to argue that the government's own impact assessment shows that delaying the proposed cuts until April next year would add just £1 a year to average energy bills in 2020, and seek clarification on how the government's proposed introduction of an energy efficiency standard for buildings installing solar panels will work.

However, DECC has consistently maintained it is committed to the current package of proposals and is believed to have taken detailed legal advice before launching the consultation.

Responding to the news, a DECC spokeswoman said: "We're consulting on proposed new tariffs for a reason - to protect consumers from footing the bill for excessive subsidies. This is a live consultation and it will be open for people to comment until 23 December. We can confirm that an application has been made for judicial review of certain aspects of the current consultation, which we shall be defending."