UK Coalition brazenly ignores damage it's doing to the solar industry

Parliament has claimed that its appeal against solar subsidies is providing value for the public, despite continued criticism over its handling of Feed-in-Tariff cuts.

The government has been criticised by the opposition over its decision to appeal a High Court ruling that its cuts to solar subsidies were illegal.  It is now expected that a further appeal will be heard at the Supreme Court.

In a written statement in Parliament, Climate Secretary Greg Barker played down the cost of legal fees for appealing a ruling on the legality of FiT subsidy cuts.

Barker said that he estimates the cost of legal action to be “£66,400 to date”, including the figure of £58,000 for the initial High Court judgement, and £8,400 for the Court of Appeal Hearing.  This figure is disputed however, with opposition MP Angela Smith claiming the figure to be closer to £125,000. Barker was unable to give an estimate of costs for a Supreme Court hearing.

In the past, the Department for Energy and Climate Change has come under criticism for the expense of government appeals, with Shadow Minister Caroline Flint condemning “wasting more money”. 

Barker hasn’t exactly calmed the situation by labelling those who oppose the government’s plans as an “environmental Taliban”.

In his written answer, Barker highlighted the potential for saving money, claiming that “we are doing this to protect consumer bills”.

“The annual cost to consumers if we did not act could be £100 million per year—more than 1000 times our legal costs to date,” he said. “The cost of defending ourselves in court pales in comparison to the £1.5 billion additional lifetime cost if we do not act.”

Despite the focus from both parties on the cost of the legal proceedings the wider impact of a lack of cohesion over FiTs looms menacingly in the background.

“I would say that the legal costs are relatively insignificant, but the cost to the industry is huge,” says UK solar industry expert at IMS Research, Ash Sharma. “The fiasco around the FiT cut and legal challenges is seriously undermining and damaging PV – both as a viable new part of the economy, and to homeowners and investors that are losing confidence in it as suitable investment.”

Sharma believes that the ongoing upheaval – started by the “kneejerk” FiT cuts – is crippling clarity about the financial viability of homeowners purchasing solar panels: “We’ve heard of many homeowners looking to install PV recently but even though the High Court ruled against the FiT cut, they still cannot be 100 percent guaranteed of receiving the higher rate,” Sharma said. “While 21p is still an acceptable tariff, not knowing exactly what rate you will be paid makes it impossible to make a sensible decision on investing several thousands of pounds.”

Regardless of the legal spending, it appears that the government’s efforts could well be in vain. A favourable Supreme Court judgement is unlikely.

Accordig to Sharma, the Supreme Court isn’t going to give the Coalition much leeway. And, in any case, they will have got their way: “It seems unlikely the Supreme Court will rule in the government’s favour, but either way they will have won: installations will be practically nothing in January and February while the FIT is under contention, as no one will be willing to invest.”

The knock-on effect for those in the solar industry is unlikely to be positive. There are real hurdles in front of growth.

 “Solar businesses in the UK are finding this very damaging and not just on the short-term halting of their business,” Sharma said. “In the long-term this creates further negative PR for the PV industry, further confuses the consumer and makes what should be a simple investment case very difficult to understand!”

Friends of the Earth, an outspoken critic of the cuts, did not bother to get back to us.