In March 2012, the UK government was denied leave to appeal to
the Supreme Court (the UK's highest domestic court) over its
planned cuts to subsidies paid to owners of solar panels. This was
the third defeat for the government who had already been
unsuccessful in both the High Court and the Court of Appeal.
Under the feed-in-tariffs ("FiT") programme,
people in the UK with solar panels are paid for the electricity
they generate and feed back into the electricity grid. The
government's plan was to substantially cut the tariffs payable
under the programme for any solar panels installed after 12
December 2011. For example, for solar photovoltaic systems with
capacity of 4kW or less and attached to existing buildings, the
rate would have reduced from 43.3p/kwh to 21p/kwh. However,
environmental campaigners and solar panel installers argued that
insufficient notice had been given and objected to the change on
the basis that it was due to come into effect before the relevant
consultation period had ended and despite the fact that many of
those that would have been affected had placed their orders for
solar panels before the changes were announced.
In December 2011, following the High Court ruling, Climate
Change Minister Greg Barker responded stating that the government
disagreed with the court's decision and would be seeking an
appeal as the higher tariffs were not sustainable. The Court of
Appeal upheld the High Court's decision that it was not within
the power conferred on the Secretary of State by the Energy Act
2008 to reduce the tariff payable to homeowners who qualified for
the programme prior to the announcement of the tariff reduction.
Energy and Climate Change Secretary Chris Huhne stated that the
government disagreed with the Court of Appeal and would be seeking
permission to appeal to the Supreme Court. He stated that they
wanted to "maximise the number of installations that are
possible within the available budget rather than use available
money to pay a higher tariff to half the number of
Following the decision of the Supreme Court in March 2012, new
Energy and Climate Change Secretary Edward Davey stated that the
Court's decision drew a line under the case and the government
would now focus its efforts on "ensuring the future stability
and cost effectiveness of solar and other microgeneration
technologies for the many, not the few."
What the ruling means
The consequences of the ruling are that:
anyone who had domestic solar panels installed before 12
December 2011 will be entitled to continue to receive the higher
rates for the full 25 years of the scheme;
anyone who had panels installed between 12 December 2011 and 2
March 2012 will also be entitled to receive the higher rates for
the whole 25 years of the scheme. This applies to approximately
30,735 homeowners and businesses;
anyone who had panels installed between 3 March and 31 March
2012 will be entitled to receive the higher rates for the period
until 1 April 2012, when their rates were reduced; and
anyone who had or has panels installed after 1 April 2012 will
only be entitled to the reduced rates.
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The Scotland Act 2012, amongst other things, devolved to the Scottish Parliament powers to determine the tax regime for disposals to landfill.
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