Government plans to rush through cuts to solar tariff payments are illegal, the High Court ruled today, 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.
"These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs, said Friends of the Earth’s Executive Director, Andy Atkins."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."
Calculations by Friends of the Earth and Element Energy suggest that the Treasury receives from the solar industry at least £330m per year in income taxes, corporation tax, and VAT. Friends of the Earth's calculations also reveal that any additional costs over budget that result from restoring the cut-off date to April, as well as allowing for moderate growth in the solar industry over the next three years at lower tariff rates, could be paid for by using this tax income - not increasing the costs to consumers.
However, the Government's proposals have already had a devastating impact. Countless planned clean energy schemes have been abandoned and thousands of jobs are under threat. Last month a report by Element Energy, commissioned by Friends of the Earth and the solar industry, showed that the premature cuts could threaten 29,000 jobs and lose the Treasury up to £230 million a year in tax income. It showed that additional costs to lift the cap off the scheme will be more than equalled by extra tax receipts to the exchequer and saving on unemployment benefit that would have been paid to sacked solar fitters. Earlier this month construction firm Carillion warned 4,500 workers their jobs are at risk because of the Government's proposals.
Friends of the Earth is calling on the Government to:
[Image: Friends of the Earth's action outside the High Court last week. Courtesy of Friends of the Earth.]
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