Uncertainty over Solar Subsidies

26 January 2012 by David Stockford

Up until recently if you installed solar power panels on your south-facing roof you were guaranteed to earn a juicy 43.3p per kWh from the government under the Feed in Tariff Scheme (FIT). However, recent events have lead to confusion over whether the high level of tariff is still available. 

Initial take up of the scheme was so popular it presented a problem for the current government who could not afford to honor the scheme under its new austerity measures. In October, the government confirmed it would be cutting the tariff to 20p per kWh on the 12th of December. As a result thousands of schemes were abandoned last year on the grounds they were no longer viable after the

Before Christmas, Friends of the Earth along with Solar Century and HomeSun launched a successful judicial review against the decision. The High Court ruled that the cut was unlawful because it was made before the accompanying consultation closed on 23rd December. The Government immediately launched an appeal in the high court on the 25th January. In a unanimous decision by three court judges, the government’s appeal was rejected meaning that the feed in tariff could return to 43.3p/kilowatt hour until 3rd March, allowing previously abandoned schemes to go ahead.

If the government takes the appeal to the Supreme Court and overturns the decision then the tariff will be slashed to 21p per kWh. However, if the appeal is not overturned then the FIT is set to return to the 43.3p/kWh rate until the 3rd March when it will be reduced to 21p/kWh.

For those who have been quick to take the scheme up they are still guaranteed the high rate of 43.3p per kWh for the next 25 years. For those who are looking at installing solar before the 3rd March 2012 the risk is that you may or you may not get the higher rate. Beware of the installer, who tells you they can guarantee the higher rate of FIT, they cannot guarantee it.

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