A further nine solar companies are seeking damages from the Department of Energy and Climate Change (DECC) following its “legally flawed” cuts to the feed-in tariff scheme last year.
The companies claim that the "unlawful and unfair" cuts to the feed-in tariff caused substantial damages to the solar companies’ respective businesses.
The nine new companies join eight previous claimants, taking the total number of companies involved in the damages claim to 17. The group is claiming that the fast-track cuts to the feed-in tariff led to a dramatic slump in orders and forced thousands of redundancies. As a result, the companies are seeking around £140 million in damages from the department.
Simon Gillett, Chief Executive of E-tricity, explained why his company feels legal action is necessary: “The industry was treated very badly, and companies must be healthy and ready to work to meet demand. Last year should have been our year for growth, innovation, investment and training, but instead it was an ‘annus horriblus’ peppered with cut backs, customer confusion, part time working, stress and redundancies.
“We had to let 30% of our staff go. So we are calling for compensation after this illegal action to help us get up to speed again and help secure the clean and affordable energy supply we need. We’ve just about made it through and our focus is now on investing in a much diminished workforce and planning for the future.”
The High Court has taken the decision to consolidate the 17 individual claims into one single case. The average size of the claims lodged against the department is £6 million, with individual claims ranging from £250,000 to ‘tens of millions of pounds’.
Initially, 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 2012, refuting all liability and refusing to pay the claimed damages after insisting it was not responsible for the losses.
Despite the number of new claimants, DECC is still adamant that it is not liable for any damages; 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.”
Labour’s Shadow Energy Secretary Caroline Flint lambasted the department’s handling of the legal battle, saying: "For months Labour warned that the government’s cuts to the feed-in tariff for solar power went too far and too fast. Thousands of people lost their jobs, many businesses in the solar industry saw their order books dry up and the number of people installing solar panels slumped. Ministers must come clean about why they pushed ahead with their unlawful plans and what legal advice they got in the first place.”
Flint added: “The government must ensure hard-pressed taxpayers aren’t left to foot the bill for its incompetence.”
Solar Power Portal understands that the evidence gathering process will take a number of months, meaning that a decision will be expected by the end of summer.
The 17 companies involved in the claim have been named as:
- Solar Power PV Ltd
- Crystal Windows and Doors
- Breyer Group Plc
- Freetricity Plc
- Foz Electrical
- Green Home Ltd
- CI Installations
- Viscount Solar Ltd
- Vsolar Ltd
- House Choice
- Evo Energy
- Solar Panels Direct
- Monitor My Solar
- Apollo Energy
- Cleaner Air Solutions