Ref. Secretary of State for Energy and Climate Change v. Friends of the Earth and others [2012] EWCA Civ 28
After being defeated in both the Court of Appeal and the High Court on plans to cut solar energy Feed-In-Tariff (FIT) payments, the Department for Energy and Climate Change is now pursuing a further and final appeal to the Supreme Court.
The 25th January saw the Court of Appeal uphold the decision of the High Court to rule in favour of the claimants: Friends of the Earth and two solar energy companies.
Contrary to the ruling of the High Court, which stated that the Government’s consultation was inadequate, the Court of Appeal concluded that the then Energy Secretary, Chris Huhne (who has now resigned over the driving license points debacle), did not have the power necessary to do what was proposed.
Crucially, the Secretary had proposed during the consultation (which closed on 31st October 2011) to reduce the subsidies for schemes which became eligible after 12 Dec 2011. He proposed that this modification came into force on 1 April 2012 and that those who had signed up to the scheme between December and April would lose much of their subsidy from 1 April.
This was deemed unlawful. Nowhere in the primary or secondary legislation on the matter (see Section 41 of the Energy Act 2008) does it allow for modification of the rate of return after the participant has joined the scheme.
In fact, the secondary legislation makes it clear that the whole purpose of the legislation is to offer participants, who have invested in the region of £9000 in an environmentally friendly installation, some guaranteed financial return. Modifying the rate of return just after a participant has joined the scheme was judged to fly in the face of this intention.
Regardless, Mr Huhne pledged to take the fight to the Supreme Court.
Huhne said: “The Court of Appeal has upheld the High Court ruling on FITs albeit on different grounds. We disagree and are seeking 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.â€
The Government has justified the changes by stating that they wish to fund as many installations as they can with the money available, as opposed to paying double to half the amount of installations.
The appeal could take another eight months to reach the Supreme Court, including a possible eight weeks before a panel decides whether to allow the appeal. Beyond that the process could take several more months, meaning a decision may well not be reached until mid-next year, assuming the appeal is allowed to go ahead.
The damage, however, has already been done. Speaking in response to the Court of Appeal’s decision, Cllr David Parsons, Chairman of the Local Government Association’s Environment Board, said:
“By announcing cuts to subsidies at such short notice, the Department for Energy and Climate Change (DECC) caused the cancellation of thousands of solar panel installations. Some councils were left with little choice but to let down thousands of tenants, while writing off millions of pounds which had been spent preparing and tendering for solar panel installations which would never see the light of day. This has also caused damage to local economies with renewable energy firms shedding hundreds of jobs as a result of contracts falling by the wayside.”
The effect that Mr Huhne’s resignation will have on whether his former department pursues this case is yet to become apparent.