Government plans to rush through cuts to solar tariff payments are illegal, the High Court ruled today (Wednesday 21 December), following a legal challenge by Friends of the Earth and two solar firms – Solarcentury and HomeSun.

The court agreed that proposals to cut feed-in tariff payments for any solar scheme completed after 12 December – 11 days before the official consultation closed – were unlawful.

Friends of the Earth is urging the Government to come up with a new proposal which would allow solar payments to fall in line with reduced installation costs, while ensuring the solar industry continues to play a key part in developing a cleaner future.

The environmental campaigning charity is also calling for more money to encourage solar installations – paid for by the revenue the industry raises for the Treasury, the removal of planned restrictions that would prevent poorer households from installing solar panels and more support for community-owned schemes.

The Government’s own independent advisors say the economy must be weaned off of increasingly expensive fossil fuels like gas by investing in clean energy and slashing energy waste. Friends of the Earth’s Final Demand campaign is urging the Government to launch an investigation into the role of the Big Six energy firms in stopping people in Britain having energy we can all afford.

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

“These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs.

“We hope this ruling will prevent Ministers rushing through damaging changes to clean energy subsidies – giving solar firms a much-needed confidence boost.

“Ministers must now come up with a sensible plan that protects the UK’s solar industry and allows cash-strapped homes and businesses to free themselves from expensive fossil fuels by plugging into clean energy.”

“Solar payments should fall in line with falling installation costs but the speed of the Government’s proposals threatened to devastate the entire industry.”

It is unsurprising that the man who headed the Department of Energy and Climate Change (DECC) when the feed-in tariffs were announced under the previous government has joined the campaign against making cutbacks to the feed-in tariff. Ed Miliband now leader of the opposition has come out in favour of maintaining the current rates paid to solar projects regardless of scale.

Greg Barker is in favour of reducing the feed-in tariffs for larger scale solar farms to ensure that investment is focused on solar rooftop installations rather than large scale solar farms which have sprung up in order to take advantage of the tariff payments. The coalition government has maintained that in order for household solar projects to be successful, a cap on payments will be introduced for all solar projects over 50kw capacity, making large scale solar farm projects financially unviable.

Miliband showed his opposition to proposed cuts by signing an early day moton with a view to provoking a debate in parliament to highlight the reasons for maintaining the solar feed-in tariff for all projects. A Labour Party spokesman commented that,

“There has been no real debate about this significant change and we want to see it debated properly at the committee level.”

The feed-in tariff works by offering guaranteed, premium rates for units of energy both used and fed-into the grid by solar photovoltaic generators. The feed-in tariff mechanism was introduced as a way of making solar projects more commercially viable by off-setting the obvious set up costs in installing solar pv equipment. Therefore, the proposed 40-70 per cent cuts for installations over 50kw could prove disastrous for larger schemes as investors are turned off by a lack of returns.

Shadow climate minister, Huw Irranca-Davies echoed the leader of the party stating,

“Minister Greg Barker’s decision to go ahead with the proposed dramatic Feed-In Tariff reductions for community, school and hospital schemes, is a big blow to British industry and betrays the government’s promise the be ‘the greenest government ever.”

Adding, “A decision such as this which fundamentally alters the future for the solar industry in the UK deserves real debate, where MPs can question the Minister on his rash and ill-thought out decision. It should not be snuck quietly through the Commons.”

The Department of Energy and Climate Change (DECC) has today announced they will press ahead with their 1st August cut off date for large scale solar farms

Energy and Climate Change Minister Greg Barker said, “I want to drive an ambitious roll out of new green energy technologies in homes, communities and small businesses and the FiT scheme has a vital part to play in building a more decentralised energy economy.

“We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency. Without action the scheme would be overwhelmed. The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities and will also further encourage the uptake of green electricity from anaerobic digestion.”

The new tariffs (below) will go ahead from August 1, 2011 and will apply to all new market entrants.

>50 kW – ≤ 150 kW Total Installed Capacity (TIC) – 19.0p/ kWh
>150 kW – ≤ 250 kW TIC – 15.0p/ kWh
250 kW – 5 MW TIC and stand-alone installations – 8.5p/ kWh

This effectively writes off large scale solar in the U.K. For a government that is attempting to be green this is a huge step backwards.

Greg Barker has ensured that for the same cost there will be less green energy produced. Here at solar feed in tariff we believe this is a terrible move for U.K policy.

• Reduced tariffs for over-50kW solar
• Increased support for farm-scale anaerobic digestion

Proposals to reduce the financial support available to larger scale solar-produced electricity have been published by the Government today as part of plans to protect financial support for homes, communities and small businesses.

The consultation follows the launch in February of a fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW after evidence showing that there could already be 169 MW of large scale solar capacity in the planning system – equivalent to funding solar panels on the roofs of around 50,000 homes if tariffs are left unchanged.

Such projects could potentially soak up the subsidy that would otherwise go to smaller renewable schemes or other technologies such as wind, hydro and anaerobic digestion.

Projections at the start of the scheme had shown no large scale solar under the FITs was expected until at least 2013.

Today’s consultation also covers proposals to provide added support to farm-scale anaerobic digestion given the disappointing uptake of such technologies to date.

Greg Barker, Climate Change Minister said:

“Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.

“I’m committed to an ambitious roll out of microgeneration technologies as part of the Coalition’s green vision of a much more decentralised energy economy.

“I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed in tariffs, rather than see that money go in bumper profits to a small number of big investors.

“These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers.

“Britain’s solar industry is a vital part of our renewables future and our growing green economy. The new tariff rates we’re putting forward today for consultation will provide a level of support for all solar PV and ensure a sustained growth path for industry.

“Taking a pro-active approach to changing tariffs will allow us to avoid the boom-and-bust approach we have seen in other countries and enable us to support more homes and community schemes, and a wider range of technologies such as wind, hydro and anaerobic digestion.”

As solar PV technology has developed, its costs have reduced, and are now believed to be around 30% lower than originally projected. This means the technology does not need as much support to be competitive.

The Government is therefore proposing reducing the support for all new PV installations larger than microgeneration size (50kW) and stand alone installations. The new proposed rates are:

• 19p/kWh for 50kW to 150kW
• 15p/kWh for 150kW to 250kW
• 8.5p/kWh for 250kW to 5MW and stand-alone installations

These compare with the tariffs that would otherwise apply from 1 April of:

• 32.9p/kWh for 10kw to 100kw
• 30.7/kWh for 100kw to 5MW and stand-alone installations

Such changes are in line with amendments made to similar schemes in Europe where in Germany, France and Spain tariffs for PV have been reduced sharply over the past year.

Alongside the fast-track review of solar, a short study has also been undertaken into the lack of uptake of FITs for farm-scale anaerobic digestion. The study suggests that the tariff for this technology is not high enough to make such schemes worthwhile. The proposed new tariffs are:

• 14p/kWh for AD installations with a total installed capacity of up to 250 kW
• 13p/kWh for AD installations with a total installed capacity of between 250 kW and 500 kW

These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500 kW.

Government policy is specifically to deliver an increase in energy from waste through anaerobic digestion, not to promote energy crops, particularly where these are grown to the exclusion of food producing crops. DECC is talking to Defra and others about the best way to implement controls to make sure this does not happen.

The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs will not be affected. Solar PV installations less than 50kW are not affected by this fast track review.

These changes are proposed to be implemented in advance of the comprehensive review of FITs, which is currently underway and will look at all aspects of the scheme.

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“Solarfeedintariff.co.uk believe the government has made a mistake in reducing their support of the U.K’s solar industry. Solar farms would have brought the country closer to its renewable energy targets much faster and more cheaply than roof top solar alone”