Feed In Tariff Uncertainty Resolved, Nearly
25.01.12
Feed In Tariff Uncertainty Resolved…..Nearly!
Yesterday morning the Court of Appeal ruled against the Department of Energy and Climate Change and upheld the High Court judgement that the Government’s December 12 feed-in tariff deadline was illegal. Initially, this ruling might seem to imply that the feed-in tariff rates will remain uncut until March 3rd at which point the Government can and will legally impose the lower 21p rate.
However, the DECC could now appeal to the Supreme Court to have the judgement overturned, despite the three judges yesterday agreeing with Mr Justice Mitting’s pre-Christmas ruling that Government’s intention to implement a December 12 cut-off date weeks before the consultation period ended was unlawful.
Today’s news has been cautiously welcomed by the majority of those working in the industry, with some celebrating the fact that the Government has finally been held to account for its actions.
Howard Johns, Chairman of the Solar Trade Association, said: “Hopefully today’s result will draw this episode to a close, and mean that one of the only growing sectors in the UK can get back to work. The Government’s appeal against the original ruling has created huge uncertainty for the thousands of small businesses in the sector, and we sincerely hope that the Government chooses not to take this further by appealing against this result.”
The news, while a victory in the sense that Government has been pulled up on its illegal actions, has begun to prompt fears of yet another rush to install as much solar as possible in the lead up to the new cut-off point on March 3.
Gough & Kelly have already started taking orders with customers keen to cash in on this mini gold rush. Given that the cost of solar PV installations has dropped dramatically in the last month, those investing now could achieve breathtaking returns on investment.
Another surge in solar installations could spell yet more potential future problems for the UK solar industry, as Government eventually now starting to keep a keener eye on the number of installations and could impose even deeper cuts on 1st April.
Libbie Henderson, Partner in the energy practice at Dickinson Dees said, “Whilst this is great news for the solar industry in the short term, it may mean that Phase 2 of the consultation will include further changes to the FiT scheme. These could include more significant reductions in the rates for new systems installed in subsequent years and/or shortening the period during which FiT will be paid.”
While DECC has confirmed the FiT rate for sub 4kw systems will not drop below 21p before April 1, it is not currently clear what the rates will be after that point, something that has been made even more unclear by Government’s intention to launch yet another appeal to the Supreme Court. It is also worth noting that this appeal could take up to a year to be heard.
A DECC spokesperson said, "The Court of Appeal has upheld the High Court ruling on FITs albeit on different grounds. We disagree and are seeking permission to appeal to the Supreme Court”.
This decision has been met with extreme contempt by industry who argue that by appealing for the second time, Government negates its promise to provide some much-needed certainty.
If you would like to discuss the potential of a solar p.v. system on your home or commercial property, please give Gough & Kelly a call on 0844 880 7100.
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