Window of opportunity
Last month’s court ruling means landlords may have a few weeks to claim the pre-cut feed-in tariff rate, says Rob Beiley, partner at Trowers & Hamlins
The social housing sector and the solar industry were shocked when, in October 2011, the government announced that it would slash the feed-in tariff for photovoltaic installations which had an ‘eligibility date’ on or after 12 December 2011.
Friends of the Earth, together with two solar companies, brought a judicial review against the government on the basis that it was unlawful to cut the FIT before the end of the government’s consultation on the tariff cut.
In December 2011, the administrative court agreed that manner of the cut was unlawful. However, the government decided to challenge that decision in the Court of Appeal.
What did the Court of Appeal decide?
In its judgement on 25 January, the Court of Appeal upheld the initial decision and agreed that the effective date for the cuts was unlawfully introduced.
What FIT rate is now payable?
This is still unclear. As a backstop position, the government announced on 19 January that there would be a new ‘effective date’ for the cut to
21p/kWh (for retrofit installations below 4kW) of 3 March 2012.
This means that for any panels which are installed, commissioned and with a FIT licence for accreditation on or before 2 March 2012, the higher FIT rate of of 43.3p/kWh might still be payable. From 3 March the rate will revert to 21p/kWh.
However, the sting in the tail is that the government has said it will ask permission to appeal the latest decision to the Supreme Court.
Is the Court of Appeal decision good news for social landlords?
Possibly. For social landlords in a position to undertake installations before 3 March, the decision is potentially very good news indeed as they may have a further window to be able to secure the highest FIT rate for further installations.
However, the government’s decision to seek an appeal to the Supreme Court means that until either permission for that appeal is refused, or the case is heard by the Supreme Court and is again upheld, anyone installing would still be taking a risk about the level of FIT they will receive.
Even if this further uncertainty is resolved, landlords must be careful to ensure all necessary permissions (for example, the consent of their lenders) are in place and not overlooked in the anticipated rush for the 3 March deadline. While it may also be possible for some deals which were close to completion in December to now be ‘pushed over the line’, the timescales to achieve this are very tight indeed.