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Legal tussle leaves FITs in a tangle

On 25 January 2012, the Court of Appeal unanimously rejected the government's appeal against a High Court ruling in December that cuts to the feed-in tariff - announced in the autumn and hastily imposed by 12 December - were 'unlawful'. Undeterred, the government promptly announced its intention to take its case to the Supreme Court. These legals moves are the latest in a series of twists and turns over changes to the Feed-in Tariff (FITs) scheme that would flatter a Protest at FITs cuts contortionists' convention. They leave the UK's solar PV industry deeply frustrated, and householders wondering just what sort of return they will get from solar panels.

Solar installers joined campaigning group Friends of the Earth (FOE) in challenging
the legality of government cuts to the Feed-in Tariffs

Last-ditch challenge

Should the government lose this last-ditch legal challenge, households that register installations of solar PV panels between 12 December and 3 March are likely to qualify for the original higher rate FIT of 43.3 p/kilowatt hour, index-linked for the full 25-year term. If the government wins its case, the FITs rate for these people will fall to 21p from 1 April. It has already been confirmed that the new 21p rate will apply, from 1 April, to installations registered after 3 March 2012. Simple, eh?

The initial ruling followed a challenge by Friends of the Earth (FOE) and two solar companies, Solar Century and HomeSun, that the introduction of the new rates was legally flawed and came while official consultation on the solar industry was still underway. The Energy Minister Greg Barker had argued that the speedy introduction of the cuts was essential for the FITs scheme to stay within budget, with the over-generous returns encouraging unprecedented high demand and threatening the viability of the scheme.

'Landmark judgement'

Welcoming the Appeal Court ruling, FOE's director, Andy Atkins, said: 'This landmark judgement confirms that devastating government plans to rush through cuts to solar payments are illegal - and will prevent ministers from causing industry chaos with similar cuts in future.' But Energy Secretary Chris Huhne defended the government's decision not to drop the case: 'We want to maximize the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations.' However, the solar industry remains severely critical of the government's handling of the tariff changes, and bemoans the continuing uncertainty.