Updated: Solar sector split after trade body backs DECC feed-in tariff appeal

Splits within the solar industry over the government's plans to rush through deep cuts to feed-in tariff incentives have deepened, following energy and climate change secretary Chris Huhne's confirmation that a major solar trade association has backed the government's recent Court of Appeal hearing.

Solarcentury, one of the parties leading legal action against the Department of Energy and Climate Change's (DECC) solar subsidy consultation, yesterday left the British Photovoltaic Association (BPVA), after its chairman allegedly tried to help DECC reverse a High Court ruling which branded its solar feed-in tariff (FIT) consultation as unlawful.

Huhne revealed in parliament yesterday that BVPA intervened on the side of DECC in its recent appeal application, which it subsequently lost, prompting the government to seek a second appeal at the Supreme Court.

Huhne said the trade body backed DECC's argument that deep cuts to tariffs were urgently needed to protect the feed-in tariff scheme from exceeding its budget.

"If we were to continue over-subsidising at the rate we that had before, then we would be able to install fewer than half of the installations we can afford to subsidise today under the new rate," he said.

"It was not an accident that the British Photovoltaic Association intervened on our side in the courts precisely as a result of that calculation."

However, Solarcentury, one of the parties leading the action against DECC, subsequently said it had been unaware of BVPA's intervention and will now resign from the group.

Derry Newman, chief executive of Solarcentury, slammed the BVPA's decision, saying it was a victim of "a classic divide-and-rule" tactic by government.

"We cannot understand how a trade body claiming to represent the best interests of the UK PV industry could have arrived at such a position, nor why the BPVA is supporting the right of the department to make retrospective changes to the feed-in tariff at any time, thus jeopardising all future investor interest in PV and other FIT technologies," he said in a statement.

"Of all trade bodies in this sector, the BPVA alone has allowed itself to be used in a classic government divide-and-rule manoeuvre. By contrast, other trade bodies including the Solar Trade Association and Renewable Energy Association have recognised what is at stake in this case and, in particular, the disastrous long-term implications of DECC getting their way."

A spokeswoman for BPVA was unable to confirm whether the chairman had indeed backed the government's legal argument.

However, on Twitter yesterday, the BPVA appeared to criticise the government's decision to appeal against this week's high court ruling, stating "now DECC has lost the case in the court of appeal, guess who is paying for the huge legal cost? You're [sic] Tax Money!"

In a statement released later, Reza Shaybani, chairman of BPVA, said that its intervention in court was solely regarding concerns over the feed-in tariff scheme's budget and did not constitute support for the government's handling of the cuts.

"The position of the BPVA with regards to the court case has always been: We believe that the reference date of 12th December and the retrospective changes to law through secondary legislation are illegal," he said.

"The majority of our members feel tariff levels should be reduced, and they wish there to be clarity and stability of the feed in tariff as soon as possible. The longer the higher tariff levels persist, the more rapidly the budget will be depleted. This would not be in the long term interests of the solar industry or the other technologies supported by the feed in tariff."

The news emerged as Labour's shadow energy and climate change secretary Caroline Flint MP accused ministers of trying to hide job losses in the solar industry, after government estimates showed the cuts to feed-in tariffs will cause redundancies.

Paragraph 73 of DECC's impact assessment on the changes initially claimed that the review of the scheme will create "1,000 to 10,000 gross additional jobs".

However, climate change minister Greg Barker last week admitted that the consultation will in fact support, rather than create, 1,000 to 10,000 of gross full-time equivalent (FTE) jobs, based on new installations until 2015.

DECC estimates there are currently 8,000 to 14,000 people employed in the sector, although the industry argues this figure stands closer to 30,000.

Flint said Barker's statement shows there will be a loss of up to 13,000 jobs, almost as many jobs as the government itself estimates are currently in the industry.

"When growth is flat-lining and unemployment is rising, solar is one industry that is actually growing and creating jobs," she said. "For months, Labour has been warning that the government's chaotic cuts to solar power would cause thousands of job losses, which ministers denied.

"Ministers must urgently explain why they claimed their plans would create jobs, when they've known all along that the cuts to solar power would put thousands of people out of work and cause hundreds of businesses to go to the wall."

This story was updated at 11.30am on January 30 to include BPVA's response.