Updated: Five more solar companies join £50 million DECC damages claim

Five companies have announced that they will joining the three previous solar companies in requesting damages from the Department of Energy and Climate Change (DECC). The companies claim that the "unlawful and unfair" cuts to the feed-in tariff caused substantial damages to the solar companies’ respective businesses.

Previously, three solar companies requested that the department agree to pay £2.2 million in damages or face the prospect of another High Court battle. DECC responded to the request in August, refuting all liability and refusing to pay the claimed damages after insisting it was not responsible for the losses.  

Prospect Law, the legal team representing the previous claimants, has issued DECC with another formal ‘Letter Before Claim’ on behalf of the other five solar companies seeking damages. The move brings the total demand for compensation to approximately £50 million. Prospect Law expects more firms to come forward and file proceedings within the next few days.

Simon Gillett, CEO of E-tricity, the only one of the five new claimant firms to be named, said: “Sadly, the damage that the Government’s unlawful conduct caused the Solar PV industry was very serious indeed. The ministerial announcement at the end of October 2011 put a great deal of pressure on both the business and its employees, forcing us to make drastic cut-backs and cost reductions wherever possible. We are one of the lucky few that have been able to keep our business moving, but the reality is that the way in which DECC attempted to introduce these cuts to FiT rates caused our business and the industry significant damage and loss. By issuing a Letter Before Claim today we are requesting that the government acknowledges the losses it caused, and takes the appropriate action to compensate us.

A spokesperson from Prospect Law added: “The 2008 Energy Act and the regulatory regime which introduced the Feed-in Tariff provided an effective set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a 'legitimate expectation' under which both the public and industry could operate. The premature and unlawful cuts, announced by the minister on 31st October last year, ignored the Government’s own policy framework.”

“By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry. Solar is a robust industry, and one the public wants, but significant damage has been done to the sector. By issuing court action these claimant firms are asking the High Court to ensure that the Government is obliged to act responsibly, face up to its unlawful conduct and the damage this caused and is ordered to pay compensation.”

Prospect Law has added that companies looking to join the damages claim being bought against DECC have until October 31, 2012 to do so – a year after the original Ministerial Announcement was made by the Secretary of Energy and Climate Change, Greg Barker.  

The news that yet more solar companies are joining in the initial damages claim will cause more controversy in the industry, which was decidedly split in its support for the legal action being brought against DECC.

The three companies that have already filed claims are: Solar Power PV; Crystal Windows and Doors; and Solarlec PV Solutions.

A DECC spokesperson told Solar Power Portal:  “While we can’t comment on the details of individual cases, the Department does not accept it has any liability and we will vigorously defend our position.”

Do you agree with the solar companies' compensation claims? Will you consider joining the group's High Court damages claim? Let us know your thoughts by using the comments section below.