FIT fight

Hold the front page: the government disagrees with the High Court’s ruling that early cut to the feed-in tariff was illegal. Wow. So no one saw that coming?

It might not have sounded like news that the government was of a different opinion to the judge when, on the 21 December, he ruled that the cut to the FIT from 43.3p/kWh to 21p/kWh on the 12 December was ‘legally flawed’ due to it being implemented before the accompanying consultation closing on 23 December – but it was.

The only thing more inevitable than the government lodging an appeal yesterday, was the reaction of Friends of the Earth, Solar Century, and HomeSun and the rest of the solar lobby to the decision.  

A spokesperson from FOE said: ‘The [High] court says the government has no realistic chance of winning, and it will prolong uncertainty among solar companies just when they need reassurance.’

The organisation called for the government to extend the reduction period into February, claiming that the scheme could be expanded at no cost to bill payers.

Hmmm. Similarly, on the grounds of costs, shadow environment minister Caroline Flint rallied herself to put the boot in over the cost to the taxpayer. So, all in all how could the government possibly defend its decision (apart from a case of pride and principle) to return to the courts after its first very decisive defeat?

The Department of Energy and Climate Change released a statement that shed a bit of light around the government’s grounds for appeal. It said the following: ‘The overriding aim of the proposed reduction in tariffs for solar PV (as set out in the recent consultation) is to ensure that over the long term as many people as possible are encouraged to install small scale low-carbon generation (including other technologies as well as solar PV) and benefit from the funding available for the FIT scheme.

‘Without an urgent reduction in the current tariffs, which give a very generous return, the budget for the scheme would be severely depleted and there would be very little available for future solar PV generators, or for other technologies. Our view is that the urgent steps we have proposed to protect the scheme for the future are fully consistent with the scheme’s statutory purpose.’

One of the more bizarre points their statement made was that the High Court’s decision was premature as ‘no decision has yet been taken, and a decision will only be taken after a full analysis of the responses to the consultation’.

That will surely leave many in the solar sector confounded.

Being a journalist rather than a legal expert I have no idea whether this logic will wash with the courts, but either way there can have been little in the way of surprise here.

Climate change minister Greg Barker had already warned, via his new favourite medium of Twitter, that for every house that receives the FIT at the higher 43.3p/kWh rate, there will be two that don’t receive it at 21p/kWh. The suggestion here was that his hands were financially tied and the shambolic cuts were a result of urgent action to protect the general public.

The underlying, and quite scary, implication was that the FITs budget has already been blown. And this was today confirmed by Mr Barker speaking to Business Green.

He said: ‘For the current year we are in the red and there is the potential that next year will be in the red. There’s some flexibility in the levy control framework [spending cap] on a year-by-year basis… But we have our budget and the Chancellor is not going to reopen the spending review.’

This may explain the government’s otherwise inexplicable approach to the whole FITs saga: someone hit the panic button when the Treasury refused to come to the rescue. But how on earth did this happen? Surely it was so, so preventable?

This will need to be answered in time, because, right now, as we report tomorrow, regardless of whether the government is granted the right to appeal, it is too little too late for social landlords.

Even if the FIT is returned to the 43.3p level for another few months, most boards have already made their decisions regarding PV schemes at the higher rate (almost all to abandon). There is not enough time or certainty to take advantage of this potential window. In short, confidence is shot to hell and the damage has been done.

If appealing is a delaying tactic from a desperate government with no cash left in the kitty then it has worked as far as social landlords are concerned.

As a departing aside, it is worth mentioning that despite the awful mess he has overseen of late, Mr Barker has become my favourite MP users of Twitter – if only because of his willingness to engage with his critics on it.

Unlike his boss Chris Huhne who only tweets the most mundane 140 characters he can about local surgeries, Mr Barker simply can’t stand by and see the twittersphere attacking without having the last word.

His arch nemesis seems to be Solar Century chair, Jeremy Leggett – one of the main figure behind the legal showdown.