Solar companies fail in judicial review of policy

15th January 2015


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  • Business & Industry ,
  • Energy ,
  • Renewable

Author

Robert Beck

Keith Davidson from LexisPSL on the failure of a judicial review application by solar companies challenging Decc's decision to close the Renewables Obligation (RO) in April 2015.

A judicial review application by solar companies challenging Decc’s decision to close the Renewables Obligation (RO) in April 2015 has failed. The High Court ruled in Solar Century Holdings Ltd and others v Secretary of state for energy and climate change [2014] EWHC 3677 that the government’s cuts to subsidies for large solar projects are legal.

In May 2014, the government issued a consultation paper on future subsidies to support the installation of solar photovoltaics (PV). It included plans to bring forward the closure date of the RO from 2017 to April 2015. Decc’s justification was the unexpectedly high levels of large-scale solar PV deployment, which risked breaching the cap imposed by the Treasury’s levy control framework (LCF).

Solar Century, Lark Energy, Orta Solar Farms and TGC Renewables brought a rolled-up judicial review application that challenged the policy change. Decc confirmed in October 2014 the early closure of the RO, though it extended the “grace period” from three to 12 months.

The claimants challenged the policy change on four grounds: closure of the scheme before 2017 was ultra vires; pre-legislation statements amounted to an “assurance” that should bind the government; previous policy statements gave rise to a “legitimate expectation” that cannot be altered; and the introduction of retrospective “grace periods” was unfair and unlawful. The judge rejected each ground and dismissed the claim.

The decision underlines that levy schemes subject to the financial limits imposed by the Treasury can change. The LCF, therefore, represents a systemic risk that all operators must always take into account.

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