SOLAR SUBSIDIES CUTS: UK government loses court appeal

The government lost its appeal on Wednesday against a judge's ruling that its cuts to solar power subsidies were illegal, suggesting thousands of homes and businesses will now be able to claim the higher payments.

Three court of appeal judges unanimously rejected the government's appeal. The government could still appeal for a second time, directly to the supreme court.

Announcing cuts to the solar feed-in tariff payments in October, ministers said the cost of the panels had dropped and unless the subsidy was also cut, the available funding for a range of low-carbon energy technologies would be rapidly exhausted. But in December, a high court judge ruled that the government's handling of the cuts was "legally flawed", following a challenge by two solar companies, SolarCentury and HomeSun, plus Friends of the Earth.

On 19 January, the government said that if it lost the legal case, they would fund the higher rate payments for any panels installed by 3 March. The Department of Energy and Climate Change (Decc) expected this to affect about 3,700 homes and businesses.

Daniel Green, chief executive of HomeSun, said: "Almost everybody except Decc have appreciated the potential and importance of the solar industry – from the National Trust, the Church of England through to the CBI as well as the British people. Surely this must be the point at which Chris Huhne stops taking the side of the big six energy companies and realise that solar is part of our future."

Friends of the Earth had called the government's action at the court of appeal a waste of public money. The group's head of campaigns, Andrew Pendleton, said on 4 January: "Trying to appeal the high court's ruling is an expensive waste of taxpayers' money. The government must expand the scheme – with all the tax revenue the scheme generates, this can be done at no extra cost to bill payers. Ministers should end business uncertainty and protect jobs with a clear plan to reduce payments from February – in line with falling installation costs."

In October, the cuts to the solar scheme – from 43.3p per kWh of energy generated to 21p – were leaked online. The climate minister, Greg Barker, defended the cuts as necessary to protect the scheme in the long term. "The plummeting costs of solar mean we've got no option but to act so that we stay within budget, and not threaten the whole viability of the Fits [feed-in tariff] scheme."

The cuts prompted a furious backlash from the solar industry and green groups, with the chief complaint being the speed of the changes, which were to come into effect just six weeks later, on 12 December. Critics also drew attention to the fact that the consultation did not end until 23 December – over a week after the changes were proposed to take place.

In December, a cross-party group of MPs said in a strongly worded report that said the reductions were "clumsily handled", had threatened jobs and could have dealt a fatal blow to the scheme, because the changes required homes to meet the C-rated energy efficiency standard before becoming eligible for the solar feed-in tariff.

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