The Government has lost an appeal against a previous ruling which stated that their decision to cut subsidies for solar panels was illegal.
The previous High Court judgment declared that the move to cut the tariff, which was implemented before a consultation on the matter had been concluded, was legally flawed. The Court of Appeal yesterday upheld that decision.
The case surrounds the controversial decision taken by the Government last October to more than halve the amount of money that they would pay to homeowners who installed solar panels.
The so-called feed-in tariffs offer those who install solar-power generating equipment the chance to receive a fee for each kW hour of energy they produce.
The announcement to cut that fee came during a consultation which the Government had set up to look into the whole subject of feed-in tariffs. This cut was then implemented in December, before the consultation had finished, prompting critics to argue that the decision was illegal. The High Court agreed that proper legal process had not been followed in a decision on 21 December last year.
The Court of Appeal rejected the energy secretary's claim that he had the power to go ahead with the move to alter the scheme before the consultation had finished. Now the Government plans to appeal the latest decision to the Supreme Court; the highest appellate court in the land.
The latest development will likely only prove to be a stay of execution for the higher tariff rate, which is still expected to come down to the new level for systems installed after March 2012. This legal battle will then only have consequence for those who have had systems installed since 12 December.
The move to cut the tariff was announced in the wake of an enormous surge in demand for solar energy driven by the high rate of the feed-in tariff. The Government fears that the court's decision not to honour the lower rate will cost the taxpayer some £1.5bn over the next 25 years.
"The future of the feed-in tariff beyond April 2012 is now hugely uncertain. Government and industry now need to work together to create a sustainable solar industry in the UK," said Ben Warren, a partner at accountancy firm Ernst and Young.
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