It’s been a difficult few months for the solar energy industry, but finally things have brightened up after the Government lost its feed-in tariff appeal.
The Department of Energy and Climate Change were appealing to the Supreme Court after their High Court case was thrown out following cuts in the feed-in tariff. In October last year the Government announced they’d be cutting the rates from 43.3p/kWh to just 21p and this was met with a backlash of criticism.
It forced solar energy companies and environmental groups to pact together in a legal bid against the Government. And two months after the High Court called the Government’s reductions ‘unlawful’ the Supreme Court has ruled out a further appeal.
This is great news for the whole solar energy industry as it ensures stability and prevents the Government from making further rash decisions.
And the news was great for many homeowners who’d installed solar panels between December 12 and March 3 in the hope they’d receive the higher rate. Because of the ruling, all solar panels installed up and to March 3 will receive the 43.3p/kWh rate, which ensures a greater profit with solar energy.
The Supreme Court’s ruling means:
- Solar panels installed and registered with the grid before March 3, receive 43.3p/kWh
- Installations after March 3 will receive the reduced rate of 21p/kWh
- The Government may still reduce the tariff further in the summer
However, there are two key points to note. Firstly, even though the feed-in tariff may be reduced, solar energy still offers fantastic returns. This is because the initial installation costs have dropped as well.
Also, even though further cuts are expected, installing before they happen ensures you’re locked onto the higher tariff rate for 25 years.
And Jeremy Leggett, chairman of Solarcentury, one of the groups who appealed the Government’s initial decision, said: “The Supreme Court has today confirmed that the Government simply has no grounds to appeal the decision that its handling of solar Feed-in tariffs was illegal.
“This final step in the legal process has wasted much needed time and money and now we, the renewables industry, simply want to get on with creating our clean energy future. Renewables can only play the pivotal role necessary to deliver a new green economy if we have a stable market and investor confidence backed by lawful, predictable and carefully considered policy.”
It was a bad day for the DECC though, who were also forced to pay the legal costs of the other parties involved in the legal case. Mr Leggett said it’s great news as it means the Government can be held accountable for any future unlawful changes.
However, Jeremy now hopes the Government can work with the solar energy groups to restore the once thriving industry.
Despite the drop in feed-in tariff for new solar installations, homeowners can still see a 15% return on their money by combining free electricity with the tariff payments. On top of this, you can still export energy to the National Grid when your system generates more electricity than you need.
With low maintenance requirements too, your solar panels will work well for 25 years and more. To prove this, many solar energy installers offer warranties for 20 years.