Government moves to compromise on solar energy tariff

The Department for Energy and Climate Change (DECC) has put a contingency plan in place in case the Court of Appeal rejects its appeal against the High Court ruling that plans to cut Feed-in Tariffs in December were illegal.

Since going to press, the DECC has lost its appeal, but is now seeking an appeal in the Supreme Court.

Last year the DECC gave the entire solar industry a few weeks' notice that the tariff paid for those producing energy from solar panels would be cut from 43p to 21p for all fitted after 12 December 2011.

But the plans were rushed, clumsy, and immediately put 30,000 jobs in jeopardy, opponents claimed. As a result, shortly before Christmas, following a legal challenge by Friends of the Earth and solar firms, the High Court ruled that the Government's plans were illegal, and payments could only be altered after going through Parliamentary procedures - allowing industry time to plan for change.

The DECC appealed this decision, and the verdict was negative. Meanwhile, the Government has laid out before Parliament draft license modifications that are subject to the correct Parliamentary process, which make provisions for a reduced rate (from 1 April 2012), for new solar installations on or after 3 March 2012.

The latest drafts end the uncertainty faced by the industry, and suggest that even though the Court of Appeal has ruled with the High Court, the tariff will still be reduced this year. According to the DECC, the tariffs must be cut to protect consumer bills and avoid bust in the whole Feed-in Tariff budget.

Commenting, energy and climate change minister Greg Barker said: "We're appealing against the court ruling that's challenged our proposal for a December reference date. But this is too important for us to sit and do nothing while we wait. Today we're putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March."

But Friends of the Earth is calling on the Government to do more to save the industry. Executive director Andy Atkins said: "Solar payments should be cut in line with falling costs - but by trying to rush through payment before the consultation closed Ministers created a shambolic mess that threatens 30,000 jobs and the future of the industry.

"Minsters must urgently use the millions of pounds in tax that solar firms generate to safeguard this industry and the jobs and businesses it has created.

"We must do more to protect cash-strapped families from soaring fuel bills - that's why we're campaigning for the Government to fix our broken energy system and enable more people to plug into clean British energy."