21 December 2011 | Alan Bouquet
Energy, Legislation, Europe

 

The controversial cuts to solar panel subsidies are unlawful according to the High Court, which has ruled on the case which has caused a storm in the industry this year. The government planned to halve the subsidies from the 12^th December this year.

The plan meant that under the feed-in-tariff system people with solar panels in Britain could be paid 43p per kilowatt hour; the new rate would make the tariff 21p. The rate for exporting energy to the Nation Grid is remaining the same at 3.1p per kilowatt hour.

The move has caused anger amongst many pro renewables groups and Friends of the Earth, Solar century and HomeSun have mounted legal challenges saying that the cuts would cost tens of thousands of jobs and lead to bankruptcies and unfinished projects.

The government claims that the cuts are necessary to create a solar industry that can stand on its own feet. It feels the subsidies are creating an artificial bubble in which otherwise uncompetitive businesses can exploit the system. Installation costs are decreasing dramatically and the tariffs no longer reflect the true needs of the industry.

Friends of the Earth agree with the fact that subsidies must be cut, but they feel that this could be done in a more gradual way, as to aid the transition to a more competitive solar industry.

The proceedings will now move to judicial review, where the government is expected to defend its position.

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