8th December deadline!!!

It has been confirmed that the Appeal Court has rejected the Government’s appeal against the High Court’s ruling that the changes proposed in the Phase 1 consultation of the Comprehensive Feed-in-tariff.

 

 

The Government applied to the Appeal Court for leave to appeal the Appeal Court’s decision to the Supreme Court. This permission was not granted. However we understand the Government does have the option to apply directly to the Supreme Court to grant permission for a further appeal. We do not yet know the Government’s intentions in this respect.

 What does this mean for FITs?

 As the law currently stands, the tariff rate applicable to <4kW PV systems remains at 43p/kWh (and the corresponding previous rates for the other bands), and the court has ruled that the 12 December reference date is unlawful.

 The Government has already laid before Parliament modifications to the draft licence conditions of the electricity suppliers to implement a 21p / kWh tariff for <4kW PV systems, taking effect from 3^rd March 2012.

 If there is no further legal challenge to the changes taking effect from 3^rd March, these will apply from that date. We believe that this could change in only two scenarios: 

·         If the Supreme Court both agrees to hear the Government’s case, and overturns the Appeal Court and High Court rulings, then the Government would be able to apply the 12 December reference date

·         If a new legal challenge were pursued successfully to challenge the consultation process that has resulted in changes taking effect from 3^rd March. To our knowledge no-one has publicly hinted of any intention to do this.

 Today’s news does not therefore remove all uncertainty, but in our view it significantly increases the probability that a 43p/kWh tariff will apply to systems installed up to and including 2^nd March.

 Whilst Government has confirmed that the current Feed-in tariff rate for solar installations with less than 4kW capacity will not fall below the proposed 21p per kWh for all systems completed between December 12th last year and March 31st this year, we believe it important that installers make clear to customers that there remains some uncertainty around the timing of tariff rate changes.

 Finally, it is also important to remember that we have yet to see Phase 2 of the Comprehensive Review consultation, which we expect to contain proposals for a more structured and predictable degression framework for the longer-term. It is, in our view, inevitable that 21p will at some point in the future be degressed further, although we do not wish to speculate on likely timings or levels.

 News is still emerging on this, and we will conduct further analysis and update in due course.