Government may face EU action for solar subsidy cut

The European Commission is threatening to take the UK Government to court over its controversial decision to cut solar power subsidies in half.

The commission became the latest party to question the move publicly yesterday, revealing that it had contacted the UK Government as it investigates the impact of the cut.

Günther Oettinger, the EU Energy Commissioner, said: "Whenever member states revise their support for support schemes for renewable energy, they need to do so in a manner which does not destabilise the renewable energy industry or risk undermining their own plans to achieve their 2020 targets."

The Government is legally obliged to generate 15 per cent of its energy from renewable sources by 2020.

"Should the UK weaken policies in such a way that it would threaten progress towards their targets, the commission would take action, launching legal proceedings if necessary," Mr Oettinger added.

He was responding to a "priority question" about the solar subsidy from Jean Lambert, Green MEP for London. Ms Lambert said: "Under the Commission's ruling, the UK is prevented from making amendments to support schemes which could jeopardise the renewables industry, yet sudden, drastic cuts to the tariff will strip away investor confidence, reduce the market for solar companies across the country and threaten jobs."

Critics say Britain's fledgling solar industry will be decimated by the Government's decision in October to reduce the so-called feed-in-tariff (FIT) subsidy it offers to households and small businesses for generating solar power from 43p per Kwh to 21p. The Solar Trade Association added that the proposed subsidy cut "had definitely destabilised the industry".

A spokeswoman for the Department for Energy and Climate Change said: "We are committed to meeting the 15 per cent 2020 renewables target. Our Renewables Roadmap sets out that solar would have a relatively limited role in cost-effective delivery of the overall target."