Emma Lui assesses the Court of Appeal ruling on a case bought by four solar energy companies against the government on subsidy cuts.
In Solar Century Holdings and others v secretary of state for energy and climate change, the Court of Appeal dismissed a judicial review appeal by four solar energy companies and upheld former Decc secretary of state, Ed Davey's decision to close the Renewables Obligation (RO) scheme to solar photovoltaic projects above 5MW two years early.
The companies challenged the decision on four grounds: misuse of statutory power; express pre-legislative assurances; legitimate expectation; and that the grace periods under the new scheme were retrospective and unlawful. In particular, they argued that the Levy Control Framework (LCF) gave rise to a legitimate expectation and included projects that were in the pipeline towards RO accreditation.
The court held that the early closure of the scheme by statutory instrument had not been unlawful and ultra vires. It said parliament had not intended that the secretary of state could only exercise powers to close the RO on or after 31 March 2017. The pre-legislative statements referred to were not binding assurances that the scheme would not be closed early and, with the inherent risk of change under the LCF in mind, had not created such a legitimate expectation.
Further, the grace periods were not retrospective and unlawful. The court said Davey had been entitled to draw a line between supporting existing accredited investments under the RO and projects in the pipeline. This was particularly plain in the context of the LCF, the court said, noting that it made clear that policies within the agreed spending cap were subject to rigorous adjustment if there was higher than expected deployment.
