Solar Policy Shambles: British Companies Claim £140 Million From DECC

A number of British solar and construction companies (17) have come together to call on the Government to rectify the damage caused to business last year by illegal policy changes. The group is calling for £140 million in damages from the Department of Energy and Climate Change (DECC) following their poor policy handling and illegal early cuts to the Feed-in tariff (FIT), the payment to clean electricity generators, which led to a sudden slump in orders and thousands of redundancies in the sector last year.

Solar power is one of the fastest growing industries in the world and is now broadly witnessing a recovery in the UK, with a stable and healthy Feed-in tariff secured in the High Court battle, firmer policy commitments and growing consumer demand. But the clean technology companies deem last year a year to forget, the FIT handling a major setback removing any opportunity to invest in jobs, training, new technology development, domestic and even overseas market expansion.

In a policy shambles deemed unlawful and unfair by the High Court, Court of Appeal and finally the Supreme Court in Spring 2012, the "˜Feed-in tariff fiasco' of 2011 caused the retraction of one of the UK's few growing areas of employment. The claim is being led by Prospect Law, the energy law firm that previously defeated the Government over the cuts. Initially a £2.2 million claim from three companies in July last year, it grew to eight calling for £50 million in October, reflecting the extent of commercial damage inflicted by the Government's policy mismanagement in 2011.

Simon Gillett, Chief Executive of E-tricity, one of the claimants, said: "The good news is that solar is now once again a sound investment. The Feed-in tariff is secure, solar prices are falling and both the Government and public now want solar to play a big role in our energy mix. But the industry was treated very badly, and companies must be healthy and ready to work to meet demand. Last year should have been our year for growth, innovation, investment and training, but instead it was an "˜annus horriblus' peppered with cut backs, customer confusion, part time working, stress and redundancies. We had to let 30 per cent of our staff go. So we are calling for compensation after this illegal action to help us get up to speed again and help secure the clean and affordable energy supply we need. We have just about made it through and our focus is now on investing in a much diminished workforce and planning for the future." He added: "The UK needs to grow the number of homes and businesses powered by solar from 370,000 to many millions to reach the UK's target of 20GW of solar power by 2020. The sector could have been well on its way and employing substantially more than the 25,000 workers it does today if the Government had acted in a legal and responsible way. If it really does support solar, it needs to compensate businesses for the losses it caused and move forward with the industry."

In May 2012 it was reported that 6,000 people had lost their jobs in the industry as a direct result of the illegal cuts and that the industry as a whole had shrunk by 25 per cent. Many believe this to be a gross underestimate of the industry's retraction, with the Government's own Environmental Audit Committee and Energy and Climate Change Committee condemning the incident as "panicky" and agreeing that such action seriously "undermines confidence".