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FIT ruling
The High Court ruled in favour of Friends of the Earth and two solar companies on 21 December, finding that government's consultation on the solar FiT breached rules governing consultation exercises. This decision came as the cross-party Select Committee published its report on the consultation, slamming government for its "unfair" handling of the proposed changes.

Government will be appealing the High Court decision in January and until that process is complete the tariff levels will be uncertain.

If the judgement stands, the rates for solar PV could potentially go back to the pre-12 December levels, until government has completed a full parliamentary process (finished the consultation, reviewed the responses and laid the changes before parliament). It is estimated that the full process would take until around the start of April 2012 – meaning that we could see the 43.3p rate (for sub-4kW projects) available for new installations up to the start of April 2012.

Tim Yeo MP, Chair of the Energy and Climate Change 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."

Plans to require homes to meet a ‘C’ rated energy efficiency standard before they can receive solar FITs will limit access to wealthier households and could have a ‘fatal impact’ on the industry, the MPs warn. Eighty six per cent of homes would need to be better insulated before they could qualify for the scheme under the Government’s proposals – increasing up-front costs for homeowners by £5,600 to £14,000, even before the panels are purchased.

Joan Walley MP, Chair of the Environmental Audit Committee added: "It doesn’t make economic sense to let the sun go down on the solar industry in the UK. As well as helping to cut carbon emissions, every panel that is installed brings in VAT for the Government and every company that benefits from the support is keeping people in work.

“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 ten 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."

A DECC spokesperson said: “We have lodged grounds of appeal with the Court of Appeal. We hope that permission will be granted for an appeal and that we can secure a hearing as soon as possible so that we can provide clarity for consumers and industry on the way forward following the consultation.

“The High Court’s decision was based on the view that the proposed approach to implementing new tariffs for solar PV is inconsistent with the FIT scheme’s statutory purpose of encouraging small-scale low-carbon electricity generation.

“We disagree with this for a number of reasons. The overriding aim of the proposed reduction in tariffs for solar PV (as set out in the recent consultation) is to ensure that over the long term as many people as possible are encouraged to install small scale low-carbon generation (including other technologies as well as solar PV) and benefit from the funding available for the FIT scheme. Without an urgent reduction in the current tariffs, which give a very generous return, the budget for the scheme would be severely depleted and there would be very little available for future solar PV generators, or for other technologies. Our view is that the urgent steps we have proposed to protect the scheme for the future are fully consistent with the scheme’s statutory purpose.”