Published on December 22nd, 2011 | by Ravinder Casley Gera6
UK Court Rules Cuts to Solar Subsidies “Legally Flawed”
Last week, we told you how a coalition of organisations led by the large UK NGO Friends of the Earth had gone to Britain’s high court to try to stop cuts in the UK’s subsidies for solar power. The feed-in-tariff, or minimum price for solar energy, is set to be cut by around 50% after a government review due to conclude later this month. But the UK’s coalition government has said that any cuts that are ordered would affect all solar power equipment installed after December 12 — before the decision to reduce the tariff has officially been made.
Today, the high court has sided with Friends of the Earth and ruled that the government’s proposals are “legally flawed.” The government is “proposing to make an unlawful decision,” the judge said.
Confusingly, that doesn’t mean the cuts will necessarily be prevented or postponed — but it does mean they’ll be subjected to a full judicial review, and some sort of postponement looks likely.
Friends of the Earth director Andy Atkins said: “These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs. We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies – giving solar firms a much-needed confidence boost.”
Feed-in tariffs are one of the world’s most effective methods for supporting renewable energy, guaranteeing producers a minimum price for their energy without direct subsidies from taxpayers. (The extra cost is passed on by utilities to customers, which encourages energy efficiency as well.)
But the significant decline in the cost of solar power installations in recent years has meant that the cost of producing solar power is less. If the feed-in tariff price remains the same, that effectively means the subsidy has increased. So it’s not surprising the UK’s government is planning to cut the tariff.
But the ham-fisted way they’ve gone about it has not only been criticised by the court, but even by the government’s own MPs. “There is no question that solar subsidies needed to be urgently reduced, but the government has handled this clumsily,” said Tim Yeo, chair of the UK’s energy and climate change parliamentary committee and a member of the Conservative party that leads the coalition.
If the effective date of the cut is postponed, it’s likely to lead to a last-minute rush in solar installations. Earlier this month in the lead-up to December 12, the government website where people register their installations crashed from the weight of user visits.