UK solar companies win High Court FIT compensation claim

A High Court judge in the U.K. has ruled that 14 solar companies seeking more than £130 million ($223 million) in damages following the government’s changes to the feed-in tariff (FIT) in 2011 are entitled to compensation.

The judge, Mr Justice Coulson, said that the claimants have demonstrated an "entitlement to damages", adding that the amount of compensation will "ultimately depend on the facts".

A spokesperson for the Deparment of Energy and Climate Change (DECC) said: "We are unhappy about the judgment and will be appealing against it. We believed we were proposing lawful changes to subsidies, which would protect consumers from rising bills at a time when windfall profits meant the industry was booming."

The grievance came in late 2011 when the DECC gave just six weeks’ notice that the financial incentives of the FIT would be cut by 50% on December 12, 2011 – several weeks before the end of the approved government consultation.

Led by a campaign by Friends of the Earth, 14 solar panel companies in the U.K. challenged the ruling at the High Court, claiming that it had been unlawful and had put thousands of jobs at risk. The High Court agreed in 2012, with the government losing its initial bid to overturn the decision.

Boosted by the High Court ruling, a group of solar companies then sought compensation from the DECC, with this week’s decision offering vindication of their claim. "The government’s cack-handed and unlawful attempt to cut support for solar power could cost it millions of pounds," said Friends of the Earth’s head of campaigns, Andrew Pendleton. "This money would have been better spent encouraging homes and businesses to develop their own clean energy and help wean the U.K. off dirty fossil fuels."

Solarlec’s Nick Keighley – one of the 14 claimants – told the BBC that the now-stable FIT, allied to lower solar costs, have created a solid, growing small-scale PV sector in the U.K. that is now firmly on the road to recovery. However, such stability could have happened much sooner if the FIT had not been unlawfully cut, he added.

The DECC’s waspish response sought to explain that the changes were necessary in order to cool a sector that would have become unsustainable if it was allowed to grow unchecked. "Solar is a huge success in the U.K., worth £2.2 billion ($3.7 billion) a year, thanks to government support, and the tariff changes that protected consumers from a £50-a-year ($85) bill rise by 2020 haven’t changed that success," the spokesperson said.