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Feed-in tariff debacle a 'spectacular own goal'

Source: Public Sector Executive Jan/Feb 2012

Adam Hewitt reports on the latest in the saga over feed-in tariff payments for solar power generation.

The Government lost its appeal to overturn a High Court ruling that its plans to cut subsidies for solar panels are unlawful – but says it will try to appeal again, this time to the Supreme Court.

Opponents to the cuts have stated that reducing the tariff would put 29,000 jobs in the industry at risk.

But Chris Huhne, the then energy secretary, said: “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.”

The budget is expected to come under further pressure as homeowners and companies rush to take advantage of the higher tariff, 43p/kWh, which has to remain in place until at least March 3.

The Government had wanted to slash this to 21p/kWh for installation completed after December 12, 2011. This deadline fell 11 days before the end of the official consultation, one of the reasons for the Government’s current legal difficulties.

CBI director general John Cridland was scathing, saying: “The judgement should be used to draw a line under this saga, which saw the Government scoring a spectacular own goal and confidence in the renewables sector undermined.

"We must bring certainty back to this highgrowth sector. Looking to the future, the Government should guarantee the rate applicants will receive earlier in the process, for all the technologies covered by the feedin- tariff, to give buyers the confidence to proceed.”

Pre-approved projects have been put on hold in Scotland too, energy minister Fergus Ewing told Holyrood’s Energy Committee. Ewing said that solar projects involving social housing should be made a special case and he has made that point to Huhne.

Ewing said: “It would be very sad indeed if those very useful projects for the most vulnerable in Scotland, or amongst the most vulnerable, can not go ahead because of this.”

He warned: “I think it is just a matter of fact, it’s not a political point, to say that as long as these matters are unresolved then it’s impossible for many investors to decided whether to invest. Before they can be expected to invests hundreds, or thousands, of millions of pounds investors need to know what the ground rules are.

“That’s a statement of the blindingly obvious.”

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