22.12.11
Solar subsidies changes opposed
The Government’s plans to slash feed-in tariffs for solar power have received a blow in the High Court.
MPs on the Environmental Audit Committee and the Energy and Climate Change Committee say the plans could greatly reduce the amount of solar powered installations, and place thousands of jobs at risk, and have labelled the Government’s handling of the issue “clumsy”.
Decc plans to halve the feed-in tariffs for small-scale solar installations from 43.3p to 21p paid per kWh of energy generated, and whilst this was originally planned for April, in October the Government announced changes would take place from December 12.
However, a group of solar companies and environmental group Friends of the Earth successfully brought legal action, arguing that the consultation had not even finished at this point. The High Court ruled that changing the tariffs before the end of official consultation period would be ‘legally flawed’.
The Government has also proposed changing the criteria for the eligibility of FITs, including the requirement for buildings to meet certain insulation standards. Around 86% of homes would need an upgrade to achieve these standards.
FITs have proved to be far more popular than the Government expected, and the cost of installation has fallen much faster. This means that around 90% of the funds planned for the four-year programme have already been allocated.
Tim Yeo, chairman of the Environmental Audit Committee, said: “There is no question that solar subsidies needed to be urgently reduced, but the Government has handled this clumsily.
“Ministers should have spotted the solar ‘gold rush’ much earlier. That way subsidy levels could have been reduced in a more orderly way without delivering such a shock to the industry.”
Climate Change Minister Greg Barker said: “We disagree with the Court’s decision. We will be seeking an appeal and hope to secure a hearing as soon as possible. Regardless of today’s outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills.”
But Joan Waller MP, chair of the Energy and Climate Change Committee, said: “The Government is right to encourage people to focus on saving energy before fitting solar panels, but these proposals will require most households to spend thousands of pounds on extra insulation before they even purchase the panels.
“This will stop nine out of 10 installations from going ahead, which will have a devastating effect on hundreds of solar companies and small building firms installing these panels across the country.”
Decc stated that the report will be fully considered, but maintains that changes are needed.
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