News and Press
FITs in focus - UK Government loses FITs appeal

In October 2011, we reported on the launch of the government's phase 1 consultation on proposed changes to the Feed-in Tariffs (FITs) scheme. Under the proposals, the Department of Energy and Climate Change (DECC) planned to reduce the generation tariffs for solar PV installations with a total installed capacity of up to 250kW. The consultation was due to close on 23 December 2011 and DECC proposed that the new generation tariffs would apply from 1 April 2012 to all new solar PV installations with an eligibility date on or after 12 December 2011 (the 'reference date').

The consultation also sought views on the introduction, from 1 April 2012, of a new multi-installation tariff rate for aggregated solar PV schemes (where a single individual or organisation owns or receives FIT payments from more than one installation located at different sites) and a new energy efficiency requirement for solar PV installations attached or wired to provide electricity to a building, meaning that if the building did not meet the energy efficiency requirement the installation would receive a lower FITs rate.

In November 2011, a judicial review application challenged DECC's decision to set the reference date at 12 December 2011. The basis of the challenge was that the reference date was prior to the consultation deadline. The High Court decided that DECC's proposal breached the statutory scheme for modifying FITs and declared it unlawful. DECC appealed this decision however, on 25 January 2012, the Court of Appeal upheld the High Court's decision.

The government has confirmed that its intends to appeal to the Supreme Court. The outcome of any such challenge is currently awaited but, pending the Court of Appeal's decision, the government put before Parliament draft licence modifications intended to bring a 21p rate into effect from April for solar PV installations with an eligibility date on or after 3 March 2012 (rather than the 12 December 2011 reference date).

In a statement yesterday, the government confirmed that it still intends to publish the phase 2 consultation by 9 February. This will include proposed tariffs for other FITs technologies and a set of reform proposals for the scheme. DECC also intends to publish a response to the other aspects of the phase 1 consultation that are not affected by the current judicial review proceedings. Clearly, until the current proceedings are finally determined, uncertainty remains for solar PV installations which become eligible for FITs between 12 December 2011 and 3 March 2012.