Government plans to cut solar subsidies ‘flawed’

Friends of the Earth and two solar companies went to the high court to challenge the government’s decision, claiming it was creating “huge economic uncertainty”.

Back in October, the Environment Secretary Chris Huhne announced that feed-in tarrif subsidies on any projects completed after 12 December this year would be cut by more than half. But the high court judge said he had been “proposing to make an unlawful decision” – which would leave many schemes half-finished or abandoned altogether.

Soaring costs

Thousands of people, councils and community groups had applied to install solar panels, thanks to a generous subsidy, designed to encourage people to go green. Ministers decided the incentives had been too generous, given the falling costs of installing solar equipment, and the overhwelming demand had pushed costs far too high.

But environmental groups said the scale and speed of the cuts had threatened the entire solar industry, and jeopardised thousands of jobs. Friends of the Earth Executive Director Andy Atkins said: “We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies – giving solar firms a much-needed confidence boost.”

Hope for solar workers

Howard Johns, chairman of the Solar Trade Assoication, said there was now hope for the 29,000 people employed in the sector. “We are happy to have cuts, but not if they kill the industry”, he said.

Climate Change Minister Greg Barker insisted his department would seek an appeal, although they will have to ask the court of appeal to hear their case. “Regardless of today’s outcome, the current high tariffs… are not sustainable, and changes need to be made in order to protect the budget which is funded by consumers through their energy bills.” he said.

Ministers are due to face another humiliating blow to their environmental policies on Thursdays, when two influential committees of MPs are expected to launch a critical review about the cuts in solar incentives.