A large-scale solar farm in the UK. Photo: Trillion Fund.
Solar firms to sue Government for ending support
Rosie Murray-West & Ruth Lumley
9th August 2014.
Four large solar firms are suing the British Government over its decision to end support for 'farm scale' solar generators of 5MW or more. The move reflects ministerial concern about the success of the UK's fast growing solar power sector.
All we need from Ed Davey and his department is stable and lawful policy, but instead he has yet again pulled the rug from under the industry's feet.
The four companies are applying for a judicial review of the Government's decision to end its Renewable Obligation (RO) scheme for solar farms with a capacity greater than 5 megawatts from 1st April 2015, two years earlier than planned.
Solarcentury, Lark Energy, TGC Renewables and Orta Solar Farms say that the Government is acting unlawfully by retrospectively pulling the plug on the existing support measures - originally designed to provide the industry with confidence and certainty.
Jonathan Selwyn, managing director of Lark Energy, said: "We are disappointed and frustrated at being forced to take this action against the government.
"All we need from Ed Davey and his department is stable and lawful policy, but instead he has yet again pulled the rug from under the industry's feet, in the process jeopardising millions of pounds of investments by SMEs."
Government: it's costing too much money
The Government has consistently argued the early changes to the scheme are needed in order to prevent large solar farms using too much of the £7.6 billion Levy Control Framework (LCF) budget that is meant to support a range of clean energy technologies up to 2021.
But Edmund Robb, a spokesman for Prospect Law, which is bringing the case on behalf of the solar companies, said: "The Government put the Renewables Obligation in place to offer solar businesses the certainty they need through legislation, but now it is trying to remove this certainty through the back door."
The move comes three weeks after a judge ruled that 14 solar panel companies are entitled to compensation from the government over cuts in subsidies for solar electricity.
These firms were seeking more than £130 million in damages from the UK government over changes to feed-in tariffs in 2011. DECC, the Department for Energy and Climate Change, has said it will appeal the verdict.
But Robb insists: "This behaviour was found to be unlawful in the case of Feed-in Tariffs, and it remains unlawful now. It is surprising that DECC has not learnt its lesson."
A remarkable record of solar growth
UK green energy has soared as government figures show electricity from renewable sources increased by 30% last year, according to The Wall Street Journal. The installed electrical generating capacity of solar also increased 59% over this period.
The outcome of proposals for 215 ground-mounted solar PV farms in the United Kingdom, with capacities in excess of 5MW are now being re-evaluated, according to findings in the NPD Solarbuzz UK Deal Tracker.
Finlay Colville, vice president at NPD Solarbuzz, said: "Ground-mounted solar PV capacity deployed in the UK has exceeded two gigawatts during the past two years.
"While there was no official cap placed on ground-mounted PV solar farms, recent installation rates appear to be well above the levels the Government was expecting."
Previously, the UK industry assumed ROCs would be available to any size of ground-mounted solar PV farm until March 2017.
Investment will shift to smaller installations
Mr Colville said: "If the proposed changes by the DECC go ahead, it will force investors and developers of large-scale solar farms in the UK to shift to the Contracts for Difference scheme, two years earlier than expected.
"Combined with the threat that ground-mounted solar farms that remain on ROCs could have a capacity-based degression mechanism imposed, the prospects for UK solar farms can now be divided into three new size categories."
According to the NPD Solarbuzz, there are currently 81 solar PV farms in the 1MW to 5MW range that could be completed under the ROC scheme, with 45 applications already approved.
Renewed focus on small-scale solar farms can now be expected, especially from small and medium-sized enterprises (SMEs) that remain cautious about the operational risks in shifting from ROCs to the untested Contracts for Difference (CfD) scheme.
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