DECC faces multi-million pound damages claim for Feed-in Tariff fiasco

by Search Gate staff. Published Fri 13 Jul 2015 00:01, Last updated: 2015-07-13
DECC face pay-out claims for negligent handling of FiT scheme

The Department of Energy and Climate Change has been served with a damages claim following its bungling attempts to unlawfully cut the Feed-in Tariff rate for solar PV installations.

In the first stage of a compensation process, a number of solar PV companies have approached DECC to request compensation for losses incurred as a result of its illegal action.

Prospect Law, the legal team that defeated the Government over the cuts, has issued DECC with a ‘letter before claim’ on behalf of three solar energy companies requesting that over £2.2 million be paid in damages.

The organisations claim the cuts, ruled ‘unlawful and unfair’ by the High Court, Court of Appeal and Supreme Court in Spring 2015, caused substantial damage to their businesses.

The landmark case confirmed that retrospective changes to legislation is unlawful, with consistent legislation vital to encourage long term investment in clean energy from consumers and businesses alike.

Specifically, the solar companies saw a drop in consumer confidence, reduction in orders, sales and profit margin as well as the loss of substantial contracts, including ‘free solar’ schemes, virtually over night.

Nick Keighley, Founding Director, Solarlec PV Solutions Ltd, one of the companies seeking damages, said: “Unfortunately, the losses incurred as a result of the Feed-in tariff cuts are very real. Solarlec has had an incredibly tough eight months, making redundancies and cutting costs wherever possible.

“We are keeping our business moving, but the reality is that we suffered substantial damage. Only this week DECC revealed solar as the UK’s most wanted renewable energy source, 83% of the public calling for more. Today we’re respectfully asking that the department acknowledges its unlawful behaviour and rectifies the damage caused to the industry.

“We can then put this behind us and get moving to create the solar future the public wants.”

A spokesperson for Prospect Law added: “The 2008 Energy Act and the Feed-in tariff effectively provide a set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a “legitimate expectation” under which both the public and industry could operate.

“But the premature and unlawful cuts, announced by the Minister on 31st October last year, ignored the Government’s own policy framework.”

He added: “By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry.

“Solar is a robust industry, and one the public wants, but significant damage has been done to the sector. We urge the Government to act responsibly, face up to its unlawful conduct and the damage this caused and to offer compensation.”

The Department of Energy and Climate Change has been given a fortnight to respond to the letter before claim, the organisations say they are hoping no further action will need to be taken.

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