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Jean Lambert London's Green MEP

UK Government could face legal action over cuts to solar Feed-in-Tariff, European Commission confirms

The UK Government could eventually face legal action over its plans to more than halve solar subsidies, the European Commission has today confirmed.

In response to a Priority Question submitted by Green MEP for London, Jean Lambert {1}, the Commission states that legal proceedings will be taken if the Government's proposal to drastically slash the solar Feed-in-Tariff threatens progress towards the UK's binding EU target on renewable energy {2}.

Under the Renewable Energy Directive 2009, the UK is required to source 15 per cent of energy needs from renewable sources, including biomass, hydro, wind and solar power by 2020.  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 which will dramatically undermine solar pv installation and capacity and weaken the UK's ability to meet its 2020 target.

In its response, the Commission also notes that any changes made to support schemes for renewable energy must be done so in a way which does not destabilise the renewable energy industry.  Yet, across the UK over 25,000 people are employed in the solar industry with thousands now facing an uncertain future.  In recent days, leading solar firm Carillion has confirmed that some 4,500 jobs are now under threat due to the planned cut to the subsidy.

Commenting on the Commission's response, Jean 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.  Rashly withdrawing support from this burgeoning industry will be disastrous for both our economy and the environment.  

"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 across the country, and threaten jobs.  In the current climate, with unemployment reaching record levels, we can ill afford further job losses which could potentially reach into the thousands. This would seem to be a risky move: "destabilising" the industry by anyone's definition.

She continued: "It is the responsibility of the Government to take every possible step to boost, encourage and support green technologies as we look to move towards a more sustainable society, rather than penalise those that have thrived. 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, or the Commission will have no choice but to initiate infringement proceedings."

Notes to Editor

1. Jean's Priority Question, submitted on the 8th November, reads: "As part of the Renewable Energy Directive 2009/28/EC, the UK has a renewable energy target of 15% by 2020.  A Feed-in-Tariff (FiT) policy has been implemented as one key measure to deliver this target.  The UK Government is now planning to significantly reduce the solar pv FiT (1) rates from those reported in its National Renewable Energy Action Plan to the Commission.  There is concern that this change will undermine solar pv installation and capacity and thereby negatively impact upon the UK's ability to achieve the 15 per cent target.  Will the Commission assess the impact of this planned change upon the UK's capacity to make sufficient progress towards and meet the 15% target?  If this FiT revision or other weakened implementation policies threaten progress towards this target, what steps and proceedings will the Commission take?"

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+P-2011-010498+0+DOC+XML+V0//EN&language=EN

2. Answer given by Energy Commissioner, Günther Oettinger, on behalf of the European Commission:

The Commission is aware of the planned changes to the UK support for photovoltaic energy and has been in contact with the UK authorities on the matter.

Following very significant reductions in the production cost of photovoltaic panels, the level of support for photovoltaic energy has been cut in several Member States.

Whenever Member States revise their support for support schemes for renewable energy, they need to do so in a manner which does not destabilise the renewable energy industry or risk undermining their own plans to achieve their 2020 targets.  The UK is committed to reaching its target of 15% renewable energy by 2020 and to following the trajectory outlined in its national renewable energy action plan.

Should the UK or any Member State weaken policies in such a way that it would threaten progress towards their targets, the Commission would take action, launching legal proceedings if necessary.

http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=P-2011-010498&language=EN