Feed In Tariff Subsidies

The court has ruled against the government on the solar subsidies for feed in tariffs under the scheme for electric production by photovoltaic panels. Under the ruling the photovoltaic industry has a respite, rather than a reprieve. The ridiculously high subsidy of 43 p per kWh will now remain in place until March, and if you have your PV system installed after the end of March I think you will “only” get 23p per kWh as a subsidy.

The legal basis for the court’s decision was that the government should not have reduced the subsidy until after the end of the consultation period. Thus, the Court argued, the decision to reduce the subsidy before consultation had ended was legally flawed.

I have been involved in many energy consultations over the past ten years. I have never seen a consultation about renewables change or even modify government policy. Consultations about other matters sometimes achieve changes but with energy, especially renewable energy, when you start to read the consultation document and see what questions are being asked your heart sinks. It is clear that policy is set and that whatever you answer nothing will change. In this sense most consultations are a sham, and on the basis that most consultations are designed to be theoretical rather than practical a brave court would have ruled that waiting until the end of the consultation period would not have made any difference to the process about which consultation was being made. The Government’s argument that paying subsidies at 43p per kWh was unsustainable trumps, in my view, the argument about the consultation.

The irony of the situation is that the very high subsidy for photovoltaic solar has created a group of very wealthy companies who have, in my view been enriched somewhat unjustly. These companies can afford now to take on the government through the courts, something that the PV industry would never have done a few years ago. In effect subsidies taken from fossil fuel energy users have been used to enrich a specific group, which once enriched has plenty of spare money to fight the government in the courts so as to ensure that the group’s unjust enrichment can continue for a while longer.

None of this should, however, detract from the point that the government set the feed in tariff at a ridiculously high level in the first place.


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