Government and green energy in court showdown over solar subsidies

The Government launched its plans to end RO for big projects with a consultation in May 2014

The Government will clash with green energy companies at the Court of Appeal tomorrow about claims it acted unlawfully over the sudden, “cynical” ending of solar subsidies in 2014.

The London-based Solarcentury and Lark Energy, in the East Midlands, are furious that the Department of Energy & Climate Change (DECC) withdrew the solar renewables obligation (RO) two years early. The RO  supported the construction of large-scale wind farms.

The two companies are now appealing, having lost a court case in conjunction with two other energy businesses, Orta Solar Farms and TGC Renewables, in late 2014. Around 6,500 jobs in the solar industry were lost between the summer and Christmas last year, fuelling criticism that the Government is not living up to its clean energy responsibilities.

The Government launched its plans to end RO for big projects with a consultation in May 2014. When the closure of the scheme was later confirmed, it was decided that solar companies which had not met certain criteria by the time the consultation started – such as having planning permission – would not qualify for the remaining subsidy, even though this was to run until April 2015.

The claimants allege this lack of grace period for firms that had spent money and built business plans based on the subsidy was retrospective and unfair. These businesses, they argue, were not given sufficient warning to get their paperwork in order so they could  still qualify.

However, the High Court ruled in late 2014 that the changes were fair and refused a judicial review. 

Lark’s managing director, Jonathan Selwyn, said the Government’s timing was a “calculated, cynical ploy”.  He added: “It’s designed to create the maximum disruption in the market and with immediate effect, which is why we pursued the case in the first place.”  

Seb Berry, Solarcentury’s head of public affairs, said: “Without investor and stakeholder confidence in policy, risky projects will cost a lot more or not be built at all.”

A DECC spokesperson said: “We continue to support the low-carbon sector but this needs to be driven by competition and innovation, not subsidies.”

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