Government will extend Feed-in Tariff cut off date if it loses legal battle

Published by Ross Macmillan for 24dash.com in Housing and also in Communities, Environment, Local Government

The Government has announced a new cut off date for the higher rate of subsidies for solar panels in the event that its bid to overturn a court ruling is unsuccessful.

Last month the Department for Energy and Climate Change (DECC) was told that plans to cut subsidy rates from December 12 - before the consultation on the cuts was over - was 'legally flawed'.

It is appealing the decision, but said if it's unsuccesful, then a new cut off date - the 3 March - will apply.

This means the planned 21p/kWh to come in from April - which will halve the rate of return for investors - will apply to new installations made on or after 3 March.

Energy and Climate Change Minister Greg Barker said: “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge.

“We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole Feed-in Tariff budget.  We’re appealing against the court ruling that’s challenged our proposal for a December reference date.  This remains our aim, and we are waiting for the judgment of the Court of Appeal.  But this is too important for us to sit and do nothing while we wait.  Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March. 

“However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date.  In the circumstances we believe this gives the industry as much certainty as is possible.  And it puts us in a better position to protect the budget for everyone involved.”

DECC's consultation on reduced subsidies closed on 23 December 2011. It says it has received over 2,000 consultation responses.

It said: "We are intending to announce the outcome of the consultation by 9 February 2012, in time for any resulting legislative changes to come into effect from 1 April 2012. Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation."