Four of Britain’s biggest solar businesses, including Lark Energy, claim Davey’s sudden and unilateral withdrawal of support for solar is unlawful.
DECC’s actions could cost large numbers of jobs and will rob the solar industry of hundreds of millions of business, say claimants TGC Renewables, Solarcentury, Orta Solar Farms and Lark Energy.
The allegedly unlawful policy change is likely to be an uncomfortable development for Deputy Prime Minister Nick Clegg who has repeatedly pledged to persuade renewable energy investors that the UK is ‘a safe and stable place to invest.’
This will be the third time legal action has been brought against DECC’s unlawful solar policies in as many years.
Just three weeks ago, Davey’s department was landed with a compensation bill of up to £132m, following its decision to make retrospective cuts to the Feed-in Tariff (FiT) scheme. The FiT supports small-scale solar, primarily on people’s homes. Sudden cuts in 2012, leaving solar installers insufficient time to react, were ruled unlawful by the High Court. Within days of the court ruling, Greg Barker the minister in charge resigned.
The latest Judicial Review accuses DECC of making the same mistake again. This time the target is the Renewables Obligation, the scheme that supports larger scale solar on the roofs of industrial buildings or mounted on the ground.
DECC has announced plans to end the Renewables Obligation (RO) in nine months’ time, two years ahead of schedule. DECC is acting unlawfully by deciding to retrospectively pull the plug on a scheme designed to provide the industry with confidence and certainty, according to the Judicial Review claimants.
The Big Four solar firms are part of an 800MW supply chain worth over £800m, with enough projects in progress to provide power to over 200,000 homes.
They accuse Davey of conducting a sham consultation and basing his plans on cost figures for solar that are way out of date and have argued that it will be Britain’s tax payers who are presented with paying the compensation bill running into hundreds of millions of pounds.
Jonathan Selwyn, Managing Director, Lark Energy, said: “We are disappointed and frustrated at being forced to take this action against the government. The industry has worked very hard to engage with government over the last two years to develop a national strategy for delivering significant new renewable energy capacity for the country.
“We have also shown how quickly we can move towards a subsidy free energy source given the right policy framework. All we need from Ed Davey and his department is stable and lawful policy, but instead he has yet again pulled the rug from under the industry’s feet, in the process jeopardising millions of pounds of investments by SMEs.”
Solar has been Britain’s renewable energy success story of the past decade. The costs of the technology have plummeted by 65% in just the last four years and the industry now employs 16,000 people in the UK – about the same as the onshore and offshore wind industries, according to PWC figures.
Solar is already a third cheaper than off shore wind power, it is close to out-competing onshore wind on price and if current trends continue, it will be cheaper than gas by the end of the decade.
Solar currently costs £100/MWh, (levelised over the course of a project’s lifetime) and could fall as low as £70 by the end of the decade. Offshore wind costs £163. Gas costs £73, and as gas prices rise, this will only increase.