Court rejects UK appeal on early solar subsidy cut

Reuters News
Posted: Jan 25, 2012 7:03 AM
Court rejects UK appeal on early solar subsidy cut

LONDON (Reuters) - The British government on Wednesday lost a bid to overturn a High Court ruling that the timing of its decision to cut subsidies for solar panels on homes was unlawful.

The Court of Appeal rejected Energy Secretary Chris Huhne's claim that he had the power to go ahead with subsidy cuts from December 12, nearly two weeks ahead of the end of the official consultation period.

The government is now considering its options, among which is the possibility of taking the case to the Supreme Court, a spokeswoman for the Department of Energy and Climate Change (DECC) said after the ruling.

The High Court had ruled that DECC's timing of a change to the so-called Feed-In Tariff (FIT) subsidy was legally flawed.

"There was no power (...) to introduce a modification which reduced a rate fixed by reference to an installation becoming eligible prior to the modification," said the Court of Appeal judges in the ruling document released on Wednesday.

Energy and Climate Change Minister Greg Barker last week presented to Parliament the same subsidy cut proposal to take effect from March 3 instead, which would solve the timing issue raised in court.

"Win, lose or draw today, important we move forward together, drive down costs and step up deployment," said Barker on his verified Twitter account on Wednesday.

Unless the government decides to appeal again and succeeds in overturning the ruling, solar panel installers will see subsidies halved to 21 pence per kilowatt-hour from March 3 instead of December 12 for installations smaller than 4 kilowatts (kW).

"We now want to put this behind us as swiftly as possible, and work with government and supporters to secure a larger budget for small-scale renewable energy generation," said Gaynor Hartnell, chief executive of the Renewable Energy Association.

The number of solar installations in Britain have skyrocketed since the government introduced generous subsidies in April 2010.

Last year, Britain installed around 3 percent of the world's new solar panels, double the numbers added in much sunnier regions such as Greece or Israel, figures from the European Photovoltaic Industry Association showed.

The uptake has been much greater than anticipated, and in an effort to prevent state funds earmarked for renewable energy to run out early, the government proposed last October to drastically reduce the FIT rates.

(Reporting by Karolin Schaps and Stephen Addison)