U.S.A. Economy News: What Are The Effects of High Courts Ruling on the Changes to Solar Energy Feed-In-Tariffs?

Wednesday, March 14, 2012

What Are The Effects of High Courts Ruling on the Changes to Solar Energy Feed-In-Tariffs?

by James K McLawsonin News / Business News (submitted 2012-02-20)

Feed-in-tariffs are a massive component of the rewards for changing to renewable technologies and for the last 10 years has driven the uptake of solar panels across the UK. In recent years changes in silicon production have severely reduced the cost of solar cells technology, making solar technology a great investment. The uptake of solar technology across the world has really caused a huge expansion of the industry from 2010 - 2011, however with the UK governments decision to change the Feed-in-tariffs in late 2011 many people have been questioning the future investment in solar energy.

Most solar installers agree with the Governments proposal that feed-in-tariffs must decrease as the numbers of solar cells across the UK rises however, the announcement of the 50% reduction in tariff from December 12th was wrong and has been ruled unlawful in the High Court. As the government go through an appeal process in the courts the current tariff is unknown. Many potential customers are now reluctant to invest in solar energy and are waiting for a result in the governments appeal.

If the UK government wins the appeal in the courts all solar projects signed off after the 12th December 2011 will be changed to the low tariffs almost doubling the return period of the investments in those projects. The shadow of the court battle has really had a dramatic effect on the solar energy industry with lots of high profile clients either reducing the number of solar panels been installed or completely postponing the solar panel projects. A great example of this is the 500 Cambridgeshire council homes that have had solar panels installed. This is less than 25% of the original 2300 homes the authority planned in early 2011.

With solar feed-in-tariffs changing on April 1st, many solar panel companies are looking to diversify into other possible renewable solutions. Some of the major solar panel companies are been forced to expand into new markets aboard or reduce costs. The second option which I fear many solar installers will be forced to make will lead to a massive cut in staff numbers and skilled workers in the industry.

The government appeal in the Supreme Court will occur early in 2012 and should end the legal battle over introduction of the low tariffs before 1st April. A press release from the Climate change minister on Thursday 9th of February set out the government's new plans, which could include possible further cuts in solar subsidies in 2012. Further information is required before the full effect of all the government's plans will be known.
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James K McLawson