Solar Feed-in Tariff cut plan ruled legally flawed

On the 21st December, the high court ruled that the Government’s plan to halve the Solar PV Feed-in Tariff was legally flawed.

Whilst this appears to be good news for those who failed to make the deadline it still creates uncertainty.  The REA (Renewable Energy Association) provides an overview of what the ruling means for customers:

On Wednesday 21st December Mr Justice Mitting upheld an appeal brought to the High Court over the Government’s handling of the feed-in tariff, stating that it was “legally flawed”.

The court agreed that proposals to cut feed-in tariff payments for any solar scheme completed after December 12th – 11 days before the official consultation closed – were unlawful.

The implications of this decision mean that the pre 12th December tariffs cannot be changed until after the full parliamentary process – i.e. an 8 week consultation, followed by a review of the responses and then a 40 day period before the legislation takes effect. This is unless the Government wins an appeal.

Government was not given leave to appeal, but if it wants to make a case it must put that forward by 4th January 2012.”

So what is the current situation? Well there are two scenarios:

  1. If the Government wins an appeal we go back to the current situation.  i.e. there is a consultation ongoing, and a domestic system can expect to earn 21p (or whatever government concludes after the consultation) from 1st April.
  2. If  the Government is not able to appeal, or loses on appeal, then the 43.3p tariff remains in place until the Parliamentary process has concluded which is expected to be 1st April 2012.

We recommend if you are considering Solar PV then you should do so before 31st March 2012 as we estimate that a 10% return is still achievable even with the FIT set at 21p and if it reverts back to 43.3p the reward will be higher.

More information please see the Department of Energy and Climate Change and Energy Saving Trust websites.