Updated: High Court Judge rules solar consultation legally flawed

The High Court has today upheld a legal challenge from Friends of the Earth and two solar firms against the government's controversial decision to slash feed-in tariff incentives for solar installations, throwing the proposed changes to the subsidy scheme into chaos.

The Court ruled the government had breached rules governing consultation exercises, when it announced that proposed cuts to feed-in tariff incentives would impact installations completed before the end of the consultation period.

Mr Justice Mitting said ministers were "proposing to make an unlawful decision" and as a result the court would be "amenable to a judicial review".

He also noted that the consultation has already had a "significant impact" on the industry in the form of projects being scrapped.

The ruling means government could be forced to retract the 12 December deadline or even relaunch the consultation, significantly delaying the timetable for when the proposed incentives to cuts will come into effect.

The judge rejected an immediate request for an appeal from DECC on the grounds it would create further uncertainty. However, DECC lawyers said they could make another application to appeal by the 4th of January next year.

Climate Minister Greg Barker later issued a statement confirming the government would seek an appeal. "We disagree with the Court's decision," he said. "We will be seeking an appeal and hope to secure a hearing as soon as possible. Regardless of today's outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills."

The decision will be hailed as a major victory by the solar industry, after firms warned that the scale and pace of the proposed cuts would have a crippling effect on the sector resulting in thousands of job losses.

It is also likely to be welcomed by the CBI and the Local Government Association, both of which criticised the government cuts.

However, DECC has consistently warned that delaying the proposed cuts to incentives could result in the feed-in tariff scheme exceeding its spending cap - a scenario that some solar industry insiders fear will result in deeper cuts to incentives in the future.

Jeremy Leggett, chairman of Solarcentury, which launched the legal action alongside HomeSun and Friends of the Earth, urged the government to now work with the solar industry to reduce incentives in a controlled manner.

"The Court has stopped Government abusing its power but it doesn't make up for the fact that DECC has created chaos for the renewable energy industry as a whole, and not just solar," he said in a statement.

"Solarcentury was very reluctant to take this legal challenge but DECC gave us no choice. All of this could have been avoided if DECC had done a proper consultation last summer, as they promised, and engaged constructively with the solar industry. I do hope that DECC will now engage properly with the industry, so that together we can build a viable solar industry in the UK, as they have in Germany."

His comments were echoed by Andy Atkins of Friends of the Earth who said: "These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs. Solar payments should fall in line with falling installation costs but the speed of the government's proposals threatened to devastate the entire industry."

However, it remains unclear how the government will proceed following the ruling.

The consultation exercise will remain open until the end of the week as had been initially planned, but assuming it does not win its appeal the government's response, which is expected in mid-January, is now likely to be informed by the threat of further legal action if it imposes cuts on installations completed after December 12 as originally proposed.

Lawyers for Friends of the Earth said that the judges ruling had effectively quashed the December 12 cut off date for installations to enjoy the current higher rate of feed-in tariffs. They predicted that under consultation rules the earliest DECC could impose a new cut off date would be mid-February. 

However, any delay to the proposed cuts will fuel concerns that the scheme could again experience a gold rush that eats into its available budget.

Gaynor Hartnell of the Renewable Energy Association (REA) warned that the ruling could end up doing long term damage to the solar sector.

"Whilst no-one in the renewables industry was comfortable with the manner in which the latest PV tariff review was carried out, the implications of this decision could be very bad for those technologies benefitting from the feed in tariff," she said in a statement. "If the tariffs do get reinstated, the rush that we'd seen before 12th December will presumably resume... This may put the longer-term future of the small-scale feed in tariff in jeopardy, when what we need most is clarity stability."

DECC was unable to comment further at the time of going to press.