The High Court has ordered a judicial review of the government's proposals to cut feed-in tariff payments for solar photovoltaic installations.
With the Committee on Climate Change also saying this week that there is no way the Green Deal will work, as presently designed, government plans to reduce UK carbon emissions are falling into disarray.
Following a legal challenge by Friends of the Earth and two solar firms, Solarcentury and HomeSun, the High Court agreed yesterday afternoon that proposals to cut feed-in tariff payments for any solar scheme completed after 12 December, eleven days before the current consultation closes tomorrow, were unlawful.
Friends of the Earth’s executive director Andy Atkins said the "botched" proposals were "jeopardising thousands of jobs".
“Ministers must now come up with a sensible plan that protects the UK's solar industry and allows cash-strapped homes and businesses to free themselves from expensive fossil fuels by plugging into clean energy,” he said.
He agreed with the government that "solar payments should fall in line with falling installation costs", which have almost halved in the last two years, "but the speed of the government's proposals threatened to devastate the entire industry".
Jeremy Leggett, chairman of Solarcentury, also welcomed the decision, saying: "We encourage the secretary of state to accept the judges' very clear ruling, not plunge the industry into a further period of uncertainty by considering going to appeal".
There seemed to be no sign of that happening last night. Climate change minister Greg Barker said the government would be seeking an appeal, and hoped to secure a hearing as soon as possible.
"Regardless of today’s outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills,” he added.
FoE is also calling for more money to encourage solar installations, to be paid for by the revenue the industry raises for the Treasury, the removal of planned restrictions that would prevent poorer households from installing solar panels and more support for community-owned schemes.
On Monday, Lord Adair Turner, who announced this week that he is resigning as chair of the Committee on Climate Change in order to focus on his role as chair of the Financial Services Authority (FSA), wrote to Greg Barker and the secretary of state Chris Huhne, expressing concern about the detail of the Green Deal and Energy Company Obligation (ECO).
He slammed the current proposals as being "an inefficient way of spending ECO funding", which would not cut energy bills for householders or enable the government to meet its carbon budgets.
He pointed out that DECC’s own draft Impact Assessment projects show that between 2013 and 2020, six million lofts and 6.3 million cavity walls must be insulated.
But the government itself estimates that just 700,000 lofts and 1.7 million cavity walls will be insulated under the ECO.
Yet this policy is supposed to account for much of the cost-effective potential to improve energy efficiency in the residential sector.
Lord Turner therefore proposes that the current Carbon Emissions Reduction Target (CERT)'s targets for insulating lofts and cavity walls be included in its proposed replacement, the ECO.
This would make it much more likely that target emission reductions would be achieved (e.g. 4-5 MtCO2 in 2020, rather than 2 MtCO2 as currently projected).
Lord Turner adds, "a less energy efficient housing stock would raise costs and risks of investing in renewable heat" (under the Renewable Heat Incentive), because electric heat pumps work less efficiently in poorly insulated homes.
He rejected DECC's argument in the impact assessment that including loft and cavity wall insulation in the ECO would crowd out the Green Deal finance, saying that there is enough money to achieve this if the energy companies and Green Deal providers have appropriate incentives, which he describes, to keep costs down.
Lord Turner's replacement as chair of the CCC is expected to be appointed by the end of March.
Further doubt on the ability of the Green Deal to meet its targets is cast by Mike Ockenden of the Property and Energy Professionals Association, writing in the current print edition of Energy and Environmental Management magazine.
He points out that there is only one local authority in the country, East Sussex, which is still monitoring the adequacy of Energy Performance Certificates (EPCs). These are the documents which will be used to estimate the energy efficiency of homes and buildings under the Green Deal.
A similar situation applies to Display Energy Certificates (DECs), which are meant to be displayed by public buildings over 1000 ft.². Many of these do not have a DEC, and yet not one has been prosecuted for this omission.
Trading Standards Offices are supposed to police the situation, and yet their departments have had their funding cut and enforcement activity has ceased completely, says Mr. Ockenden.
Without a monitoring system in place, and certification available to purchasers of homes to show how energy efficient they are, the nation's energy consumers are being forced to consume more energy and have higher bills.
At the root of all of these troubles for the government's energy policies can be found the spending cuts and the dispute between the Treasury and the Department for Energy and Climate Change over budget allocations.
This dispute looks set to continue in 2012, with the low carbon industry sectors looking anxiously for the reassurance they need that their future is secure.
Story: David Thorpe, News Editor