Kiran Stacey Solar companies challenge UK subsidy review in court

The group of UK solar companies behind the campaign against the reduction of the subsidies for larger projects has asked the courts to quash the government’s review altogether.

Greg Barker, energy minister, announced in March that the government intended to cut the level of public subsidy for large solar farms after a brief review of feed-in tariffs.

The companies have filed a claim in the High Court for judicial review against Chris Huhne, energy secretary, and hope they can get the energy department to start all over again on the process of deciding which projects get which subsidies.

The groups have included four arguments in their case:

  • The energy department previously indicated that the review would take place in 2012, with changes being implemented in 2013.
  • There was a suggestion that an early review could take place based on a certain “trigger point”, but that trigger point was never set.
  • There is no evidence of the “excessive deployment” of large-scale solar power about which the energy department warns.
  • Large-scale solar is more cost effective, and so reducing subsidies at the larger end to balance the cost to the consumer doesn’t make sense.

One of the companies involved, Low Carbon Group, told Energy Source they have already had to cancel an investment trust they had set up with investment company Ingenious Media, and return the £30m they had attracted, to investors, after the review suggested the subsidy reductions.

Roy Bedlow, the Low Carbon Group’s chief executive, also said the nervousness had filtered through to other parts of the business, with investors into its tidal and wind power divisions also beginning to hold back. He said:

This move has created uncertainty in the entire sector. Investors are holding back and waiting. They say they want to see more information on what is happening to subsidies and why.

But the companies have a difficult task. To succeed with their case, they have to show that the review is not just bad, but it is worthy of being quashed by the courts, in this case on the grounds that the policy is irrational. They also say the outcome of the review was pre-determined, which they claim is shown by negative comments from ministers about large-scale solar.

However, applying for judicial review is often used as a way of drumming up publicity for a cause, and they will have to persuade the courts this is not an example of that.

It seems that the campaign group has a struggle on its hands. Bedlow himself admits their lobbying efforts have had no discernible effect on officials within the energy department.

Their best bet might actually be to use the dynamics of the coalition to their advantage, and lobby Lib Dem MPs in the South West, where most of the large-scale projects were planned, to put pressure in turn on the party leadership. As the local elections loom, the party might decide this is a good issue on which to put some clear water between them and the Tories. But then, with a Lib Dem in charge of the energy department, that might prove a tricky position to maintain.