Government sued for £140m over Feed-in Tariff fiasco

The legal battle between the solar industry and the Government over cuts to subsidies back in 2011 has taken another turn with the news that 17 companies are to sue the Government for damages worth £140 million.

The long-running battle between the Government and a determined band of solar PV installers ended up in the high court last year, with the way the Government went about implementing cuts to the feed-in tariff (FiT) scheme ruled to be “legally flawed”.

Announcing cuts to solar subsidies before it was allowed to, the Government fought the ruling but both the Court of Appeals and eventually the Supreme Court agreed that the Government was indeed at fault in the way in which it handled the whole affair. Although cuts to solar subsidies were indeed necessary – particularly in light of falling costs to manufacture and install the technology – the industry wasn’t given enough notification to handle the sudden changes.

The Government’s handling of FiTs has had a hugely negative impact on what at the time was a booming solar industry, with more than 100,000 new installations prior to October 2011 when the news hit that FiTs were to be cut. Growing businesses suddenly saw the number of inquiries fall drastically, with a massive 90% fall in new installations, when solar subsidies were slashed by more than half from a healthy 43.3p/kWh to 21p/kWh. As demand for installations has fallen, companies have been forced to lay off staff with as many as 6,000 job losses according to industry estimations.

Despite a court ruling which saw the cuts delayed until 3 March 2012 – originally the lower FiT rate was to come into force from 12 December 2011 – there’s no denying that the Government’s handling of the whole affair has put consumers off installing solar panels and the solar industry has been fighting to get back on its feet ever since. Part of that process has led to a group comprising of 17 solar companies taking the fight one step further by implementing legal action with them now seeking £140 million in damages. Back in July 2012 it was just three companies seeking £2.2 million but with more companies getting on board that figure has risen dramatically.

Evo Energy, Solarlec, Crystal Windows and Doors, Viscount Solar, Freetricity and E-tricity are among the claimants.

“We are calling for compensation after this legal action to help us get up to speed again and help secure the clean and affordable energy supply we need,” explained Simon Gillett, Chief Executive of E-tricity, who have been forced to cut a third of their workforce as a direct result of the feed-in tariff fiasco.

Find local, MSC certified Solar Installers

Start your quote

Find local, MSC certified Solar Installers