Solar firms invited to join feed-in tariff legal challenge
15 Nov, 2011
First hints of possible rethink emerge as Telegraph reports ministers are considering phasing in changes....
Solar firms are being invited to formally join legal action against the government, challenging its controversial decision to slash incentives for new installations with effect from next month.
Solarcentury announced last week that it would seek a judicial review of the government's decision, after ministers proposed cutting feed-in tariffs for solar installations by 50 per cent, with the changes coming into force from 12 December.
Late last week Friends of the Earth and solar firm HomeSun confirmed they would join the Solarcentury claim as separate claimants, further cranking up the pressure on the government to reconsider its proposals.
Other interested parties, including solar firms, NGOs, housing associations and local authorities, are now being invited to lend their weight to the case by either formally linking themselves to the claim or donating funds to support Solarcentury's claim.
The Department of Energy and Climate Change (DECC), which has consistently argued the scale and pace of the proposed cuts to incentives is necessary to stop the scheme exceeding its spending cap, confirmed last week that it would contest the case, paving the way for a potentially lengthy legal battle.
BusinessGreen has obtained a copy of a letter from Solarcentury's lawyers, Prospect Law, that is currently being circulated by the solar industry, inviting organisations to join the claim as "interested parties".
"This would involve Prospect Law linking firms to the claim that has been launched," the letter explains. "This requires an application to be made to the court. We would need to prepare an application form, a witness statement and short evidence from any IP that would be directed to supporting the claim; ie, to explain potential losses to the company and its clients, a range of potential lost projects, the amount of time it has taken to get projects going prior to installation and registration for FiTs [feed-in tariffs], potential lost jobs, etc."
The letter also details the grounds for the legal challenge, arguing: the proposed changes are "procedurally flawed" as they would come into effect before the end of the government's official consultation period; the decision is "irrational and unfair" as it does not give firms time to complete projects in the pipeline; and ministers have defied the "legitimate expectation" firms had that "ill-considered and destructive" changes would not be made to the feed-in tariff scheme.
BusinessGreen understands that a number of solar firms and other interested parties have expressed an interest in supporting the legal action and further announcements are expected in due course.
"If there are going to be multiple challenges to the government along similar lines it makes sense to have them coalesce around one action," said an industry source.
The legal action is part of a growing campaign to force the government to order a rethink of the proposed changes and delay their introduction until the new year.
A series of letters have been written to ministers and MPs calling for an urgent rethink, while a series of protests are planned for Westminster on 22 November.
Meanwhile, today saw the first indications that the government may rethink some aspects of its proposals, after the Telegraph reported that climate change minister Greg Barker is considering whether to "phase in" the proposed cuts to incentives.
Citing sources in the department, the paper reported that if there is sufficient money left in the £867m budget when the consultation period finishes on 23 December, the government could phase the cuts in over the coming months.
The move would give solar firms more time to complete projects currently in the pipeline and avoid any backlash caused by householders who have paid deposits for installations but will not be able to complete them before the current 12 December cutoff, leaving them with half the return on investment they had been expecting.
A DECC spokeswoman refused to be drawn on the prospect of changes to the current proposals, telling BusinessGreen that "the proposals are as they are in the consultation, which closes in December".
Any phasing-in of the cuts would be extremely difficult to manage, as ministers cannot legally announce any changes to the proposed reforms until after they have considered the responses to the consultation.
That would mean any projects not completed before 12 December would likely be shelved until a ministerial decision in mid January on the timeline governing the pace at which the cuts will come into effect.
Barker met with industry representatives last week and insisted that while he remained committed to supporting the sector he would not countenance changes to the proposals that would result in the feed-in tariff scheme exceeding its spending cap.
He warned that the cap could be breached as early as next April if cuts are not imposed as soon as possible.
He also confirmed that ministers were now unable to make any changes to the proposed package of reforms until after the consultation exercise has been formally completed on 23 December.
By James Murray
Business Green