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Government loses appeal on solar PV FiTs

25 January 2012

The government's appeal against a recent court decision to block its attempts to halve the feed-in tariff (FiT) for solar photovoltaic (PV) installations has failed in the Court of Appeal. The government had argued that the existing subsidies were unsustainable. Energy secretary Chris Huhne disagreed with the latest verdict and signalled that his department will seek permission to appeal to the Supreme Court.

“We have already put before Parliament changes to the regulations that will bring a 21p rate into effect from April for solar PV installations from 3 March to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry," said Mr Huhne. "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 half the number of installations. Solar PV can have strong and vibrant future in UK and we want a lasting FiTs scheme to support that future and jobs in the industry.”

This announcement by the High Court looks likely to set the UK’s rate back to 43.3p for sub-4kW systems installed until 3 March 2012, reversing the government’s decision to lower the tariff to 21p on 12 December 2011. Today’s judgement means that anyone who has installed PV since 12 December and those intending to install it before the 3 March cut-off point, will receive the higher rate feed-in tariff for the full 25 years.  Customers who register on or after 3 March will qualify for the current higher rate until 1 April, when the rates drop to 21p, as previously set out in the 31 October announcement.

Perry Jackson, general manager of photovoltaic systems at Mitsubishi Electric comments:

"Whilst this could provide a welcome short-term boost to sales and installation of PV panels the industry does still need to find ways of engaging with customers to highlight the tremendous benefits that the technology offers individual homes and businesses beyond government incentives. The costs of materials and labour for systems are now lower than ever and PV is, therefore, still a highly attractive proposition whether FiT is set at 21p, 43p or somewhere in between.
“Each new installation still offers other added benefits that aren’t affected by the tariff such as reduced energy bills, self-consumption and future-proofing yourself against rising energy bills whilst lowering your carbon footprint.

“Everyone will initially be relieved that a decision has been taken by the High Court and that the higher rate will apply until March, but DECC is now considering its position so this may not be the end of the uncertainty. Meanwhile, there are a huge number of consumers interested in lowering their energy bills that we should still be talking to.

“We all knew that the rate was going to change and we can’t sit back and wait for a final decision, especially when the argument for PV is still strong enough regardless of the tariff. As an industry, we need to focus customers’ attentions on the benefits of investing in a renewable solution rather than relying totally on finite supplies of increasingly costly fossil fuel resources.”


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