Britons who wish to install solar panels this Christmas are left wondering about how much money they will receive in state subsidies after the High Court Wednesday decided the government had acted unlawfully in its rate-setting process.
The government proposed at the end of October to halve so-called feed-in tariffs (FITs) for solar plants for projects below 4 kilowatts (kW) installed after December 12, but the legal consultation process on the proposals will not finish until December 23.
Mr Justice Mitting Wednesday ruled this process legally flawed, leaving solar plant owners uncertain about whether projects installed after the proposed deadline would make use of old or new tariffs.
The government said it will appeal against the decision and hopes the process can be finalised as soon as possible.
Customers are very nervous about investing when there is such uncertainty Angus Hone, owner of SolarShire, a company which helps farmers and owners of leisure facilities manage their energy costs, told Reuters.
My concern now is whether demand is at a sufficient rate to cover overheads. Do I have enough business coming to cover for the future? I don't know.
Solar plant installers were already surprised by the government's handling of solar power FITs earlier this year, when the energy ministry announced sooner-than-expected cuts to tariffs from August 1.
The interest in making use of FITs for solar plants has been much higher than the government had anticipated, which threatens to deplete a set budget for renewable state aid earlier than its 2015 end date, forcing the government to again make steep rate cuts.
The current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills, Climate Change Minister Greg Barker said in response to the ruling on Wednesday.
The number of installed solar projects in Britain doubled in less than two months to 230,000 projects until December, government data showed.
Weekly solar installations in the week ended December 11 reached an all-time high of 29,880, compared with just 812 projects registered the following week, which included the proposed subsidies deadline.
As a result of the high uptake, UK solar power production capacity has risen more than sixfold this year to just below 760 megawatts (MW).
Wednesday's ruling will not prevent the changes in FITs for solar, which the industry thinks are necessary but they need to be set at fair levels which reflect drops in solar module costs.
We hope we won't need FITs in a few years, said Howard Johns, spokesman of industry campaign 'Cut Don't Kill' and Chair of the Solar Trade Association.
This case is not just about solar. It shows government has to adhere to its own rules.
(Editing by James Jukwey)