What a brouhaha we have seen recently. The immensely successfully Feed In Tariffs (FIT) which have seen an impressive growth in the installation of solar photovoltaic (PV) panels in particular across the UK have been altered by the Government more than once and this has created a lot of uncertainty.

So what is really happening?

Well - to cut a long story short - the Government (DECC) spotted in late 2011 that the FIT scheme was becoming a little too successful for its own good (or maybe their liking!) and the budget that they had imposed themselves might be exceeded.

They decided to initiate a process to reduce the incentives, which included a public consultation, but introduced this too quickly resulting in a massive influx or orders and installations during November and December 2011 and a successful legal challenge in the High Court by Friends of the Earth just before Christmas. The High Court said that the Government action was unlawful.

The Government decided to appeal to the Court of Appeal which was heard in January 2012; again the Government was unsuccessful and their appeal was denied – all 3 judges were unanimous.

So where does this leave us all?

Technically the current rate reverts to the old rate (43.3p up to 4kW) until 3rd March when it will “legally” change to 21p. However the Government has sought permission to appeal again to the Supreme Court. If this is allowed and the Government is successful then the Government’s original date of 12th December 2011 for the rate decrease could stand.

To put this into context, 4 senior judges have now decided against the Government; what are their chances of success if they appeal further to the Supreme Court? In addition to this the Supreme Court may take 2 months to even decide if leave to appeal will be given and a further 6 months to hear the case. By then 3rd March will be well and truly gone!

In conclusion The rate between now and 31st March is GUARANTEED to be at least 21p for systems up to 4kWp There must be a decent chance that the Government will not be allowed to appeal or their appeal will be unsuccessful – in which case all installs from 12th December 2011 to 31st March 2012 will receive 43.3p or equivalent for the full 25 years. Unfortunately this is NOT GUARANTEED.

There is currently also no certainty after 1st April – rates could go down again. Again NOT guaranteed.

So if you think that the new rates are attractive enough at 21p, now is a great time to invest in solar PV and the upside is that you might get 43.3p. What is certain is that rates will not get any better over time!

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