Feed in Tariffs

Following the decision of the Court of Appeal that the government has no power to make retrospective changes to the Feed in Tariff (FiT) Scheme, the government has announced that it will continue to defend its proposed modifications.

Whilst the case impacts heavily on the solar power tariff industry, the decision centred on the key issue of whether the government has the power to make retrospective changes.  The decision reminds all public bodies that when considering changes to schemes, the starting point has to be any enabling legislation.

In the Court of Appeal’s view, the government’s proposal was unlawful because the Energy Act 2008 and secondary legislation does not provide for a rate that might fluctuate according to the decisions of the secretary of state.

In contrast, it held, that owners of solar installations are entitled to subsidies at a rate set by reference to the year in which the installation becomes eligible.  The overall thrust of government policy that tariffs should be cut from this April is unaffected by this decision. In practice, the decision only really affects installations that became eligible over a short period of time.

Secretary of State for Energy and Climate Change v Friends of the Earth and Others (25 January 2012; (2012) EWCA Civ 28)

For advice on feed in tariffs, advice on energy supply agreements or the energy sector in general please contact Stephen Attree or Awena Parry in our commercial department on 0845 0738 445 or email info@mlpsolicitors.co.uk