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Brussels warns of legal action over FiT cuts

The European Commission has confirmed that the UK government could face legal action over plans to reduce Feed-in Tariff rates if it is found to threaten progress towards the UK’s binding EU target on renewable energy.

The UK is required to source 15 per cent of energy from renewable sources by 2020 under the Renewable Energy Directive 2009.

The confirmation came in response to Green MEP for London Jean Lambert’s question on what steps the EC would take if the UK was found to be threatening progress towards the target.

Ms Lambert said: “At the same time as world leaders meet in Durban to negotiate a new binding agreement on climate change, the UK government is attempting to rush through foolhardy and damaging changes to an incredibly successful renewable energy scheme, which has resulted in 100,000 solar installations, the creation of over 22,000 jobs and almost 4,000 new businesses.

“Under the commission’s ruling, the UK is prevented from making amendments to support schemes which could jeopardise the renewables industry, yet sudden, drastic cuts to the tariff will strip away investor confidence, reduce the market for solar companies and threaten jobs.”

She added that the government must now demonstrate that plans to slash the subsidy will not derail the UK from delivering 15 per cent of energy from renewable sources by 2020. The government is already facing action from UK organisations.

But in his response, energy commissioner Günther Oettinger said that, while the commission had been in touch with the government over the planned cuts, several member states had already acted in similar fashion, due to “very significant reductions” in the production cost
of photovoltaic panels.

Several contractors have announced they are scaling back operations in solar photovoltaic panels, including Carillion.

Meanwhile, renewable energy firm Strategic Energy has secured a £10 million funding framework agreement with independent specialist investment manager Hazel Capital to finance installation of solar PV to social housing properties in the North and North-west.

The first phase of the partnership is under way and will see the company install solar panels to 350 homes, to be completed by 12 December, the cut off point for the higher-rate Feed-in Tariff. Funding for the second phase is in discussion and will potentially include a further 3,000 PV panels.

The government’s plans to cut the tariff will see payments for electricity generated by solar energy fall from 43p per kWh to just 21p - a move that has been challenged by the solar industry, green groups and opposition parties.