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The Court of Appeal today (Wednesday 25 January 2012) unanimously rejected Government attempts to overturn last month’s High Court ruling that its plans to rush through sudden cuts to solar tariff payments are illegal.

The Government is now seeking permission to appeal to the Supreme Court. Friends of the Earth says the move will create yet more uncertainty for solar firms and after two courts have ruled their move illegal is urging Ministers to concentrate on safeguarding the industry rather than wasting more time and money on further appeals.

The High Court ruled shortly before Christmas that Government plans to cut payments for any solar scheme completed after 12 December – 11 days before the official consultation closed – were unlawful. The judgement followed legal challenges brought by Friends of the Earth and two solar firms, Solarcentury and HomeSun, last month.

Today’s judgement will prevent Ministers rushing through cuts to feed-in tariff payments in future, restoring some confidence to the UK’s clean energy industry. But Friends of the Earth warns that unless Ministers change other parts of their solar subsidy proposals, up to 29,000 jobs could be lost.

Friends of the Earth is urging Ministers to find more money – paid for from tax payments the industry generates – to safeguard the long-term stability of the solar industry. The environmental campaigning charity is also calling for crucial amendments to proposed Government solar payment changes, including re-examining over-strict energy efficiency rules that will prevent 90 per cent of houses from claiming solar subsidies.

Today’s ruling means that, subject to any further appeal to the Supreme Court, solar tariff payments will remain at 43.3p (p/kWh) until 3 March 2012 when – following Government moves last week – they will fall to 21 pence.

Friends of the Earth’s Executive Director Andy Atkins said:

“This landmark judgement confirms that devastating Government plans to rush through cuts to solar payments are illegal – and will prevent Ministers from causing industry chaos with similar cuts in future.

“The Government must now take steps to safeguard the UK’s solar industry and the 29,000 jobs still facing the chop.

“Ministers must abandon plans to tighten the screw on which homes qualify for solar payments – and use the massive tax revenues generated by solar to protect the industry.

“Helping more people to plug into clean British energy will help protect cash-strapped households from soaring fuel bills.”

UK farmers have been able to benefit from feed-in tariffs but as the government plans to review the sum paid for solar energy in 2012, now is the time to invest. The British government introduced feed-in tariffs under the guise of the Clean Energy Cash back scheme back in April and was designed as a way of boosting investment in solar photovoltaic (pv) energy which would help the UK meet climate change targets through the reduction of carbon emissions.

The feed-in tariff works by offering guaranteed, premium rates for units of energy both used and fed back into the grid from small scale solar pv generators. Where they have been implemented elsewhere, they have proved to be very effective mechanisms at incentivising investment in what were once expensive projects. However, government plans to reduce the rate of energy paid to solar pv generators after 2012 means that now is the time for UK farmers to take full advantage of the profits from solar panels.

Many landowners are already taking advantage of the tariff rate which guarantees a rate of 29.3p/kWh for units of energy generated from their solar panels. Certainly, with projects lasting for 25 years, there will be some very healthy profits to be made, something which has not gone unnoticed within the industry. Regen South West are just one example of solar energy specialists involved in rural solar projects. Chief Executive Merlin Hyman has described such projects as an ‘exciting opportunity’ and that they can offer,

“Essentially it is a guaranteed income for 25 years with a better return than if you were to put money in the bank at the moment. But it needs to be in the right place and on the right sites.”

The emphasis of finding the right sites has been echoed throughout the industry. Also, there has been a focus on the need to avoid fly by night installers keen to make a quick Buck and run in the great UK solar Klondike.

This is a view supported by solar pv exponents, Mole Valley Farmers who have their own demonstration solar site set up on their director’s land and are offering open day invites. Business Development Manager at Mole Valley, Andy Taplin has warned that,

“We are aware of lots of businesses popping up and calling themselves solar energy experts, what we’re trying to do is prevent businesses profiteering from our members.

Going on to add, “our main concern is that for these investments to work the solar panels need to last for 25 years to profit from the feed-in tariff — Mole Valley Farmers will be here in 25 years’ time, but I’m not sure some of these solar panel companies will be around once the gold rush is over.”

As usual, it seemed that the UK was falling behind competitors from abroad from a reluctance to look to the future and fully back green energy through strong legislation. Solar markets in Spain, Germany and Italy to name but a few in Europe, attracted investment through incentive schemes in the form of feed-in tariffs. With the UK government finally introducing the Clean Energy Cash Back scheme in April 2010, it now appears that the financial mechanism is in place to help UK solar investment catch up with more mature markets overseas.

According to many within the industry, the UK now has everything in place to become a player in the global solar market.

“The UK market for solar PV is growing explosively. This is because the FITs [feed-in tariffs] bring a huge new raft of players – the energy users – into the market; broadening it way beyond the traditional energy industry. All renewable power sources are benefitting, but solar is doing best because it is so easy to apply,”

Commented Philip Wolfe, Director of Ownenergy and leading exponent of feed-in tariffs.

With the tariffs working as a means of incentivisation for investors who were once reluctant to invest in what was once an extremely expensive field, the tariffs offset costs and greatly improve the attractiveness of green energy investments. In all countries where tariffs have been introduced there has been a massive uptake in investment with individuals keen to take advantage of legislation-protected investments with healthy ROIs.

With regards to potential for the solar PV industry, Edwin Koot CEO of Solarplaza stated that,

“Having experienced the benefits that FITs have to offer, European countries are now looking to capitalise on the emerging UK market. We can already see signs of this happening for our upcoming UK PV Conference: where 67% of delegate registrations are from international companies, compared to just 33% from the UK.”

However, warning that in the current climate the UK solar PV industry is unlikely to achieve overnight success, Clive Collison of South Facing said,

“It will take time to develop the UK market. Currently there is a lack of knowledge so education of potential customers and businesses is needed. Right now, very few people understand the feed-in tariff system and the opportunities to their full extent.

It took Germany, Spain and Italy three years after the start of their feed-in tariff to reach a substantial market scale. No doubt a similar market development will occur in the UK. That is why conferences like the UK PV Conference are important, to educate the business community and customers and build the business infrastructure. There will be plenty of business for everybody.”

Energy company E.ON has announced that they will me making full use of the Clean Energy Cash Back scheme in bringing in a solar offering to its customers. The Cash Back scheme which came into effect on April 1 is essentially a feed-in tariff system offering small scale renewable generators cash for money used on site and better rates for money fed-in to the national grid.

E.ON plan to utilize the newly introduced legislation in order to offer their customers what they term the ‘SolarSaver’ scheme, a consultation, survey and installation service for solar photovoltaic products.

E.ON hope that their SolarSaver scheme will act as a sound investment product over 25 for its customers with expectations that it would take just 12 years to break even with 13 subsequent years of profit on the project.

According to the energy company, they claim that this projection is based on the fact that a 2.1kW solar kit costs around £11,350 and would be capable of generating around 1.5kWh p/a. Homeowners would expect to save in excess of £24,000 over the project’s lifespan with the added bonus of helping to offset their carbon footprint on fossil fuel energy savings.

A turnkey product is expected with E.ON stating that their solution will offer homeowners advice on the suitability of their home for solar paneling, consultancy for application of planning applications and advice for customers about entitlement to grants and other government schemes.

Phil Gilbert, spokesman for the SolarSaver scheme announced,

“We’ve all got a role to play in bringing down our carbon footprint and we’re helping our customers do that. With the long term benefit provided by the new Feed-in Tariff they’ll even make money back.

Adding, “This will be the first of many exciting new propositions we’ll have for our customers, giving them the power to produce their own heat and electricity from lower carbon sources.”

For full information about similar investment schemes offered through solarfeedintariff.co.uk please visit: http://solarfeedintariff.co.uk/solar-investments/