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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.”

Friends of the Earth is urging the Government to re-think its plans to slash payments for solar electricity schemes today (Monday 12 December 2011), as the rush to install solar payments ahead of a crucial payment deadline comes to an end.

The Government has halved the payments for any solar electricity scheme completed from today, which will almost double the payback period for homes, businesses and communities.

Later this week (Thursday 15 December 2011) Friends of the Earth and two solar companies – Solarcentury and HomeSun – will ask the High Court for permission to challenge Government plans to cut the payments.

The premature cuts could cost up to 29,000 jobs and lose the Treasury up to £230 million a year in tax income, a report commissioned by Friends of the Earth and Cut Don’t Kill – an alliance of solar firms and consumer and environmental organisations – revealed last month. Earlier this month construction firm Carillion warned 4,500 workers their jobs are at risk because of the Government’s proposals.

Countless schemes have already been abandoned, denying cash-strapped homes and businesses the chance to free themselves from soaring fossil fuel prices.

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

“These Government cuts will cast a huge shadow over our thriving solar industry and pull the plug on thousands of jobs.

“We don’t oppose modest payment cuts in line with falling installation costs – but the size and speed of these proposals will decimate an industry that could play a key role in weaning the nation off of expensive fossil fuels.

“Ministers must think again and give their support to an industry that could and should be at the cutting edge of a clean energy revolution.”

The Government’s rationale for cutting the Feed-in Tariff for Solar PV so fast and so drastically is that it is a necessary measure in order to keep expenditure of Feed-in Tariffs in check. Many reports in the media and statements by ministers themselves have suggested that Solar PV is costing households a large amount on their energy bills (the Feed-in Tariff is considered levy on energy bills by the Treasury and therefore labelled a form of taxation). We are concerned that the Government and the large energy companies are not being transparent about how much of taxpayers money gets spent on the various energy technologies and misleading people into believing the cost of renewable is higher than it really is.

As an example, according to an email seen by Engensa from the energy regulator Ofgem, officials have calculated that the cost of the Feed-in Tariff to household energy bills is less than £1 per year. This agrees with Engensa’s own research found here. In contrast, the UK tax payer pays hundreds of times more than this towards the cost of decommissioning nuclear power stations and looking after the nuclear waste they generate. According to the Government’s own figures, £6.93bn of taxpayers money was given to the Nuclear Decommissioning Authority in 2010-2011, which equates to £260 per household.

As Green Party leader Caroline Lucas MP pointed out in a recent speech, when there are dozens of Big 6 employees working inside Parliament contributing to policy as secondees, and hordes of energy company lobbyists pushing for the decisions they want, it is very important that the Government is absolutely transparent about the costs and benefits of the various options so that the public, not big companies, can decide.

www.engensa.com

Commenting on news that services company Carillion has told 4,500 staff that their jobs are at risk following plans to halve subsidies on solar power, Friends of the Earth’s Energy Campaigner Donna Hume warned:

“This is just the tip of the iceberg – if Ministers push ahead with plans to slash solar subsidies tens of thousands of jobs could be lost.

“A fraction of the cash the Chancellor set aside this week for more roads and dirty energy would throw a lifeline to the solar industry and the thousands of skilled workers currently facing unempolyment.

“The solar industry has a crucial role in reducing the nation’s dependency on expensive fossil fuels and developing the clean future David Cameron has repeatedly promised – Ministers must abandon plans to pull the plug on it.”