Supreme Court throws out government appeal over feed-in tariff cut
Ruling hands ALMO £10m
A landmark legal ruling on solar subsidies will result in a £10 million profit for an arm’s-length management organisation.
Ascham Homes had expected to make a £1.5 million loss on photovoltaic solar panels it installed this January after the government decided to cut the feed-in tariff it pays to renewable electricity producers from 43.3p/kWh to 21p/kWh in October last year.
However, last Friday, the Supreme Court upheld previous rulings from the High Court and Court of Appeal that said the government had acted unlawfully in applying the FIT cut retrospectively on 12 December 2011 with just six weeks’ notice.
The decision to dismiss the government’s third and final attempted appeal draws a line under the saga. Landlords that installed PV on their properties after 12 December and before 4 March will now be able to claim the full 43.3p/kWh FIT rate.
Ascham, which manages 12,400 homes on behalf of Waltham Forest Council, decided to bring forward its plans to install PV because of the ongoing legal battle. Had the ALMO received the 21p/kWh tariff, it could have made a £1.5 million loss.
Ascham asked contractor Breyer Group, Apollo Group and project manager John Rowan & Partners to accelerate its solar programme so that it installed 680 of 1,000 PV systems - the biggest scheme in London - by 3 March.
The ALMO used Waltham Forest Council’s low prudential borrowing rates - up to 2 per cent lower than the cost of private bank finance - to fund the £7 million scheme over the 25-year life of the FIT.
Paul Lowenburg, chair of Ascham, said: ‘Most organisations were quite risk adverse as a result of the uncertainty over the FIT. But we knew we wanted free electricity for our tenants so decided to go for it. Now we hope that we will be able to make a surplus of up to £10 million [over the 25-year life of the FIT] as a result of this ruling.
‘We are planning to use this £400,000 a year to create a regeneration fund, which we can use for more energy-efficiency works and solar panels, as well as new build development.’