Huhne warns solar firms not to promote higher feed-in tariff
26 Jan, 2012
Energy Secretary defends decision to take solar fight to Supreme Court after DECC confirms its legal costs have reached £66,000...
Energy and Climate Change Secretary Chris Huhne has today warned solar PV installers can not assume the current feed-in tariff rate stands at 43p/kWh, after confirming the government plans to appeal against a second court ruling that branded its original consultation to cut solar incentives as unlawful.
Solar energy companies yesterday welcomed a Court of Appeal ruling, which said the government had acted unlawfully in proposing cuts to feed-in tariffs for solar installations completed after December 12 last year, on the grounds the cuts would come into effect before the end of the consultation on the proposed changes.
But Energy Secretary Chris Huhne today warned that firms should not take the ruling as a sign they can now promote the previous 43p/kWh feed-in tariff rate, because the government was planning to appeal against the decision.
"We respectfully disagree with the judgment and are seeking permission to appeal to the Supreme Court," he said in a ministerial statement.
"In the light of that, we cannot rule out the possibility that lower tariffs could be applied to installations which became eligible for FITs on or after the proposed reference date. It is important that consumers are aware of this."
A spokeswoman for the Department of Energy and Climate Change (DECC) dismissed suggestions Huhne was hinting that the rate could go lower than the 21p/kWh proposed by the government.
"He's talking about those on 43p. We're very clear that from 1 April - tariffs will be 21p," she told BusinessGreen.
However, the statement is likely to undermine any celebrations from the solar industry over its court victory yesterday. It will also fuel speculation that the government's appeal is primarily designed to dampen demand in the market in order to help protect the budget for the feed-in tariff scheme.
Ministers and some representatives of the solar industry are concerned that confirming the higher 43p/kWh rate could result in a "mini solar gold rush" as consumers and businesses seek to secure the higher feed-in tariff rate before the government again imposes cuts from March 3.
But the decision to appeal means the current feed-in tariff rate still can not yet be confirmed, potentially limiting demand for new installations.
This morning Huhne faced a barrage of criticism from MPs in the House of Commons over DECC's decision to take the case to the Supreme Court.
Most notably, fellow Liberal Democrat MP Jo Swinson attacked the coalition's "chaotic management" of the feed-in tariff scheme and urged DECC to put the solar industry on a sustainable footing as soon as possible.
Labour MP Mary Glindon asked Huhne how much more public money he intended to "waste" fighting the court ruling, while Labour MP Ben Bradshaw, accused DECC of "staggering arrogance", urging it to abandon the "costly and doomed legal case".
DECC yesterday told BusinessGreen that its legal costs had reached £66,400 since Friends of the Earth, Homesun and Solarcentaury announced they were seeking a judicial review against the consultation in November. The government could also be forced to pick up the legal costs of its opponents if it loses its latest appeal.
Huhne defended the government's appeal application, arguing any legal fees would be much lower than the £1.5bn DECC estimated would be added to the total cost of the feed-in tariff scheme if the current rate remained in place - an argument he said had been supported in court by the British Photovoltaic Association.
"I would merely point out that we are spending a few thousand pounds in order to save consumers £1.5bn, which is what would've happened if we had left this case to run," he said.
He also again attacked the previous Labour government for introducing a "faulty" scheme that did not allow the government to reduce the tariff in line with the falling costs of solar technology.
"The reality is that the when the other benches were in power, they introduced a scheme that was fundamentally flawed and we are putting this right," he said.
Huhne also confirmed that DECC would launch a full review of the wider feed-in tariff scheme on 9 February.
sourced from Business Green