Government loses second case on solar tariff cut
The government had said the subsidy cut would ensure the scheme carried on in the futureThe government has failed in an appeal against a decision which blocked its attempts to reduce solar subsidies.
The Court of Appeal case involved the government's move to halve the payments made to households with solar panels, which it says are unsustainable.However, the government has said it will seek leave to take the case to the UK's Supreme Court.
Under the feed-in tariffs programme, people in Britain with solar panels are paid for the electricity they generate.
The rulings will not affect households that have installed panels before the changes on 12 December.
Solar businesses and campaigners had warned thousands of jobs could be lost as a result of the proposed tariff cut.
"We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to halve the number of installations," said Energy and Climate Change secretary Chris Huhne.
Employers' group the CBI said the government should abandon its legal battle.
"The judgement should be used to draw a line under this saga, which saw the government scoring a spectacular own goal and confidence in the renewables sector undermined," said director general John Cridland.
Damian Kahya
The latest twist in the legal battle over solar subsidies will leave consumers more confused than ever.
When the government announced that subsidies would be halved from 12 December, it prompted a rush of installations, but not everyone beat the deadline.
However, that cut has now been declared unlawful by two courts.
It means consumers may still be able to get the higher rate on installations finished since 12 December, at least until the government's new cut-off period of 3 March.
With the 43p tariff one of the most generous in the world, many may be tempted to take a punt.
But with legal action now moving to the Supreme Court, consumer group Consumer Focus is warning consumers to ensure they can still afford the lower, 21p rate, before investing.
If not, the government may yet win its case and consumers who have installed panels since 12 December would be caught short.
Confusion
The decision, and the government's intention to launch a second appeal, will lead to widespread uncertainty for consumers and installers.
It means consumers cannot know what subsidy they will receive for any panels installed since 12 December.The previous tariff was just over 43p per kilowatt-hour generated.
The new tariff of 21p per kilowatt-hour had been expected to come into effect from 1 April.
But in October, the government said the cut would take place ahead of schedule, with the reduced rate paid to anyone who installed solar panels after 12 December.
The government announced a consultation on the proposals, which closed on 23 December - 11 days after the decision was to have been implemented.
The High Court ruled that changing the tariffs in this way was "legally flawed", a decision the Court of Appeal has now upheld.
The change had particularly upset industry, as it affected projects which may already have been commissioned, but not installed.
"This decision has very important implications for the whole renewable energy sector in the UK," said Ben Warren, a partner at Ernst and Young.
